Ladies and gentlemen, welcome to Kuaishou Technology first quarter 2025 financial results conference call. Please note that English simultaneous interpretation will be provided for management prepared remarks. This English line will be in listen-only mode. I'll now turn the call over to Mr. Matthew Zhao, VP of Capital Markets and Investor Relations at Kuaishou Technology. Thank you for waiting. The conference will recommence shortly. Thank you, our better. Good evening and good morning to everyone. Welcome to Kuaishou Technology first quarter 2025 financial results conference call. Joining us today are Mr. Cheng Yixiao, Co-founder, chairman, and CEO, and 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 first quarter 2025 results announcement called March 31st, 2025, 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, a reconsideration of IFRS to non-IFRS financial results and related risk factors, please refer to our first quarter 2025 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 consecutive interpretation during the Q&A session. Please note that English interpretation is for convenience purposes only. In case of any discrepancy in management statements, it is their original language that will prevail. Lastly, unless otherwise stated, all currency units mentioned are in RMB. I will hand the call over to Yixiao. Hello everyone. Welcome to Kuaishou Q1 2025 earnings conference call. In Q1, despite a complex and evolving global macro environment, we achieve a solid financial performance through the continued integration of AI technology across our businesses. These intelligent upgrades strengthen both our content and business ecosystem. Across our platform, users and content creators enjoy a better experience, and emerging online marketing clients' operational efficiency improved. As a result, our average DAUs on the Kuaishou App reach a record high of 408 million in Q1. Our total revenue grew by 10.9% year over year to RMB 32.6 billion. GP margin approached 55%, adjusted net profit reached RMB 4.6 billion with a 14% adjusted net margin. Our new businesses have continued to deliver promising results, demonstrating a strong momentum for a second growth curve. Kling AI maintained its global leadership in advanced technology while accelerating its commercialization, generating over RMB 150 million in revenue in Q1. Our strategic focus on core international markets is also beginning to yield tangible results for our overseas business. After two years of execution, our overseas business delivered its first-ever quarter of operating profit in Q1, steadily increasing revenue growth. Next, I'd like to elaborate on how to progress our key business segments in Q1. First, AI strategy. Kling AI will continue to advance the quality and effectiveness of our large video generation models while launching more innovative features to meet a diverse range of user needs. In April, we launched the Kling AI 2.0 video generation model, marking a significant upgrade to the large model and its global debut, and setting new global benchmarks in motion quality, semantic responsiveness, and visual aesthetics. This latest version also marked the official debut of our breakthrough concept of interaction multimodal visual language. Building on this foundation, we introduced a multimodal editing feature that allows users to combine various inputs, such as images, videos, voice, and motion paths, to produce customized videos that better reflect their creative intent. Creators can also add, remove, or replace visual elements in generated videos by using image or text prompts, giving them greater creative control throughout the editing process. Kling AI's relentless pursuit of the state-of-the-art large model video generation technology and performance has earned it widespread recognition from subscribers and corporate clients around the world, contributing to rapid revenue growth. In Q1 alone, revenue from Kling AI reached RMB 150 million. Today, Kling AI is being used across a range of industries, from advertising to marketing, film, animation, and foreplays. This growing adoption reinforces our belief that Kling has the potential to become the foundational infrastructure. We have integrated AI technology across our businesses, embedding AI capabilities through our content and business ecosystems. Large models have deepened our understanding of content and user interest, allowing us to precisely match user demand with content value. In turn, this increased user time spent and activity on our platform. AI technology is also embedded across our online marketing solutions. AIGC marketing material production, marketing placement agent, large marketing recommendation models, and large bidding inference models have all improved and boosted our clients' marketing conversion efficiency. In Q1, average daily advertising spending on AIGC marketing materials remained RMB 30 million. We also introduced a real-time interaction feature for our digital human live streaming rooms, which led to an increase in conversion rates. In the e-commerce scenario, we heightened matching accuracy between users and merchandise based on large model structured understanding of product attributes. Tools like AI intelligent customer service, AI trials, smart product presentation fortified e-commerce merchants' marketing capabilities, reducing their operating costs and amplifying operational efficiency. Second, user growth and content ecosystem. In Q1, average DAUs on the Kuaishou App reached 408 million and MAU 712 million, up by 3.6% and 2.1% year- over- year, respectively. Average DAUs on the Kuaishou App set a new record, exceeding 400 million for the third consecutive quarter. The average daily time spent per DAU on the Kuaishou App was 133.8 minutes, while total user time spent rose by 5.9% year on year in Q1. Our refined user growth strategy lowered average user acquisition costs. For example, we increased the user's rate of opening the app by optimizing the push strategy and product form, among other measures. On top of that, with a steady supply of rich, high-quality content, ongoing improvements for our traffic distribution system, and diverse community features, we elevated content consumption experience with a better user retention rate. Chinese New Year has always been a key period for user growth and brand marketing. For the 2025 Chinese New Year holiday, we created an effective online celebration for our 400 million users, offering engaging interactive features and extensive content matrix. Interactive elements effectively sparked greater social interactions across the platform. During the campaign, the pairs of average daily new mutual followers were scored by over 40%, and the number of active daily private messages among users with mutual followers grew by 1%. Our extensive Chinese New Year's content lineup, including the online festive fairs, Kuaishou Spring Festival Gala, and Liaoning TV Spring Festival Gala, delivered a deeply immersive content consumption experience. The content generated over 15 billion live streaming views and over 200 billion short video views, with a focus on Kuaishou's traditional stronghold in Northeast China. Through a series of events such as the Kuaishou Winter Olympics, Liu Laogen Grand Stage, and the Northeast Comedy Show, we also entered the penetration of characteristic native content and its influence in the dominant region. In sports, we entered a new phase of strategic collaboration with NBA China, continuing to be an official short video platform and video content creation community for NBA China. Together, we're building a diversified content matrix, including short videos of game recaps, NBA-themed variety shows, and micro short plays, and interactive live stream programs with NBA stars for users' more engaging content and interaction. Third, online marketing services. In Q1, revenue from online marketing services grew 8% year on year to RMB 18 billion. By integrating AI across our online marketing solutions, we enabled clients from content consumption, e-commerce, local leads, and other sectors to improve their brand marketing efficiency and achieve better conversion outcomes. This, in turn, led to more budgets from marketing clients. We also applied large language models, content understanding, and reasoning capabilities to improve the results of our marketing content recommendations. With combined off-chain thought reasoning based on user behavior, this enhancement further improved the conversion efficiency of marketing materials. In Q1, external marketing services remained a primary growth driver for online marketing services, with particularly strong contributions from the content consumption and the local service sectors. For the content consumption sector, marketing spending from short plays experienced a strong year-on-year growth. We encouraged marketing clients to align their campaigns with native and platform content operations, such as short plays, mini-games, and novels, which increased the content value and fostered user stickiness, while also deepening the platform's understanding of user preference. For the local service sector, we provided solutions and algorithm optimizations that were better aligned with customers' various needs. For example, we offered multiple lead-based solutions, including native private messaging and lead form collection, helping them to reach customers and improve conversion rates. In Q1, marketing spending from local services industry jumped over 50% year on year. In terms of intelligent product placement solutions, the penetration rate of UAX placement solutions continued to rise, making up more than 60% of total external marketing spending in Q1. Additionally, we actively explore and refine our closed-loop marketing solutions to support e-commerce merchants in building more intelligent omni-domain operations on Kuaishou, heightening their operational effectiveness. In a pen-shelf-based e-commerce segment, we introduced merchants' high-quality content and products through optimized marketing placement to sales funnels, and our enhanced algorithm strategies improved the matching efficiency. These endeavors increased merchants' marketing budgets in terms of intelligent efficiency enhancement. Our Omni-Platform Marketing Agent 4.0 delivered greater stability in merchants' omni-domain ad placements, offering a richer variety of control tools and enabling more convenient operations. In Q1, e-commerce merchants using the Omni-Platform Marketing Agent 4.0 or smart hosting products contributed 6% of total closed-loop marketing spending. Fourth, e-commerce business. In Q1, e-commerce GMV grew by 15.4% year on year to RMB 332.3 billion, with the number of e-commerce monthly average active paying users reaching 135 million. We continue to optimize consumer shopping experience. We empower more merchants and KOLs to expand their operations on Kuaishou, capitalizing on the omni-domain synergies between content-based scenarios and pen-shelf-based e-commerce. In Q1, small and medium-sized merchants on Kuaishou grew rapidly, mainly driven by our ongoing efforts to enhance support for the new merchants and the application of large models across various scenarios. The number of newly onboarded merchants rose by over 30% year on year in Q1, benefiting from early-stage traffic support and a series of cost-reduction policies for new merchants. Moreover, we continue to align incentives and subsidy options to merchants' key growth cycles. In particular, we launched five major programs, including fast-track access, targeted promotions, subsidy incentives, and more, to assist export-restricted companies to tap into the domestic market. At the same time, we advanced the use of AI large models across merchants' operations. In Q1, we provided live streaming merchants with a full set of intelligent streaming tools, including AI-generated scripts, description prompters, smart audio commentary, and intelligent product selection. The adoption of these tools has helped more merchants achieve operational breakthroughs. In Q1, we advanced our KOL e-commerce by establishing dedicated merchandise operation centers to support KOLs in distributing high-quality products at a greater scale, further strengthening our control over merchant selection and supply. We also deployed KOL and operational resources across our platform to engage socialized brands through structured platform-endorsed groups. During the Chinese New Year's shopping season, we launched a New Year blockbuster initiative to focus on high-demand product categories and integrate platform-wide selling capabilities by introducing premium products at competitive prices. We also fortified the price advantage of individual items by providing subsidies on top of the affordable prices, helping KOLs enrich their product selection in their live streaming rooms, lowering the threshold of order placement conversion, and increasing sales. For small and medium-sized KOLs, we supported their efficient growth through initiatives like our Rising Star initiative. By offering traffic initiatives, cash support, and city-level operation support, we successfully expanded our medium-tier KOL base. During the Women's Day Promotion Day, GMV from KOLs rose by 30%, and the GMV from small and medium-sized KOLs surged by over 50% on a year-on-year basis. In terms of diversified scenarios, we continue to enhance our three-in-one business model that combines live streaming, shopping mall, and short video. In Q1, shelf-based e-commerce GMV once again outperformed overall GMV growth, accounting for about 30% of total e-commerce GMV, with steady improvements on both the supply and demand side. In Q1, average daily active merchants grew by over 40% year-on-year, driven by our proactive efforts to tap into industrial zones to attract quality merchants, enrich our supply base, and broaden our product selection. We also benefited from enhanced traffic support across recommendations, search channels, and stores. During the Women's Day promotion, shelf-based e-commerce GMV and search-induced e-commerce GMV soared by 51% and 108% year-on-year, respectively. Short video e-commerce GMV also saw strong momentum, increased by over 40% year-on-year, as we made e-commerce content more expressive and engaging by embedding short video into live streaming. The synergy between the short video display advantage and live streaming's high conversion efficiency increased content diversity and drove more efficient user conversion. Furthermore, our large AI model expertise has elevated the overall service capabilities of e-commerce merchants. By utilizing large model agent technology and multi-module capabilities, the resolution rate of our intelligent customer service increased to 80% in Q1. This lowered merchants' costs and shortened the average response time, improving the overall user experience. Our AI capabilities continue to upgrade our e-commerce infrastructure. AI has deepened intelligent applications in product information construction, recommendation algorithm optimization, and content creation tools, strengthening the customer product matching and simplifying content production for merchants. These advancements injected incremental momentum into our e-commerce system. Next, regarding our live streaming business, in Q1, live streaming revenue returned to a positive growth trajectory, increasing 14.4% year-on-year to RMB 9.8 billion, propelled by a firm focus on diverse top-tier content. We made consistent efforts to build a healthy, stable live streaming ecosystem to amplify the value of live streaming content consumption. We further strengthened our operation in core categories, including multi-host and group live streaming. By the end of Q1, the number of our partner talent agencies had grown by over 25% year-on-year, and talent agency management streamers increased by over 40% year-on-year. We also doubled down on developing premium grand stage content to help streamers and KOLs efficiently retain followers and unlock more monetization potential. At the same time, we introduced targeted support policies and optimized the traffic mechanisms, bringing offline entertainment and cultural consumption formats online and fostering organic offline-online interactions. We enhanced these users' interest and engagement in high-quality live streaming content. We continue to strengthen our gaming content ecosystem by deeply integrating short video live streaming and community operations, which help game developers break through traditional promotional barriers. We also collaborated with major e-sports events on live streaming copyrights and cooperated IP-based events while operating our own e-sports team, KSG. These endeavors drove more exploration and innovation aimed at combining gaming and entertainment live streaming content. Beyond content, our live streaming plus strategy continued to empower traditional industries. In Q1, our daily number of users submitting resumes on Kuaishou Higher increased by over 110%. The number of matches grew by over 300% year-on-year. In IDEO Housing, the daily lead generation surged by 150%. Finally, in terms of our overseas business and local services progress, in Q1, our overseas business continued to make steady progress, with revenue rising by 32.7% to RMB 1.32 billion. Online marketing services maintained a strong year-on-year momentum. With effective cost and expense control, our overseas business achieved quarterly operational profitability for the first time. We further improved overseas customer acquisition efficiency by focusing targeted promotion on high-value demographics. This contributed to steady DOU growth in Brazil, one of our core international markets. Following the tremendous success of sponsoring the Brazil Reality Show BBB last year, we doubled down our strategic partnership to become this year's exclusive official short video partner of BBB 2025. This boosted Kuaishou brand visibility in Brazil and delivered richer entertainment content and interactive experiences to local users. Supported by our sustained algorithm and traffic optimization, the average daily time spent per DOU in Brazil continued to grow steadily both year-on-year and quarter- over- quarter. On the monetization front, we leveraged our strong base of extensive local content to help advertisers in building a new content-driven marketing approach that uses multiple product formats to reach their target user groups. At the same time, our e-commerce business in Brazil saw healthy growth in order volume, supported by disciplined ROI management. In Q1, our local services business deepened its presence in larger cities. We refined our operations around city clusters, leveraging our user base to offer high-value-for-money local products and services. Through dedicated small city projects, we further expanded our presence in these markets, drawing local service GMV to sustain rapid year-on-year growth in Q1. Over 65% of its growth came from lower-tier cities. Category-wise, in-store dining services remain the backbone of our local service business with steady growth. The general in-store business has seen balanced development across the onsite retail, leisure, entertainment, and other categories. On the supply side, the number of active merchants and available merchandise grew by 81% and 71.3% year-on-year, respectively, in Q1. We also encouraged merchants to adopt self-operated live streaming, which, together with their employees, promotions, and KOL distribution. With the support from AIGC-driven content creation tools, this allowed us to scale both the quality and the volume of content more efficiently, helping merchants gain high-quality traffic exposure. Greater product content supply drove user transaction conversion, with the number of average monthly paying users increasing by 73.1% year-on-year in Q1. Regarding monetization, we further optimized our local advertising products, improving the native operation of leads and traffic allocation strategy, which reinforced the effectiveness of merchants' marketing placements. As a result, local service revenue rose twofold year-on-year. In addition, our dual engine promotion strategy, combining large-scale campaigns with targeted small-scale promotions, improved both merchant marketing efficiency and effectiveness of their subsidies, leading to continued loss narrowing for our local service business. To conclude, facing a complex and evolving marketing environment, we will remain committed to our founding mission and user-centric approach. Through AI technology, we are fortifying Kuaishou's content and business ecosystem while pushing the boundaries of monetization. We are confident that by staying focused on the long-term technology investment and delivering real user value, we will be able to rise above short-term cycles while improving user experience, empowering industries, and giving merchants and marketing clients more tools to drive quality and efficiency. We will create more value for shareholders. This concludes my remarks, and now the financial part. Thank you, Yixiao Cheng. Hello everyone. During the first quarter, we advanced our iterative upgrade of our Kling AI large model to further strengthen our core competitiveness. Meanwhile, we enhanced the user experience and helped online marketing clients and merchants improve operational efficiency and expand their business with rich content and continuously optimize the traffic coordination mechanism. These efforts result in healthy and steady growth in both our operating metrics and financial performance, laying a solid foundation to support our full-year goal. In Q1, our total revenue increased by 10.9% year-on-year to RMB 32.6 billion, and adjusted net profit reached RMB 4.6 billion, representing an adjusted net margin of 14%. In particular, our overseas business delivered its first-ever quarter of operating profit in Q1. Now, let's take a closer look at our Q1 financial performance. Our total revenue grew 10.9% year-on-year to RMB 32.6 billion in Q1. The increase was driven by growth across each of our core businesses, including online marketing services, e-commerce, and live streaming. Online marketing services revenue increased by 8% to RMB 18 billion in Q1, from RMB 16.7 billion in Q1 last year. This increase was driven by the full process application of AI technology in our online marketing solutions, which significantly enhanced our marketing materials conversion efficiency and led to increased consumption from marketing clients. Revenue from other services, including e-commerce, reached RMB 4.8 billion in Q1, up 15.2% from RMB 4.2 billion in the same period last year. This increase was mainly attributable to the growth in e-commerce GMV, which boosted e-commerce commission income. Leveraging our refined omni-domain operations and AI empowerment across various scenarios, we further elevated the number of e-commerce monthly active paying users and monthly active merchants in Q1. We also provided merchants and KOLs with richer marketing tools and more diverse traffic incentives, helping them grow rapidly and expand their businesses. In Q1, our live streaming revenue was RMB 9.8 billion, an increase of 14.4% from RMB 8.6 billion in Q1 last year, resuming positive year-over-year growth. We're committed to building a long-term and sustainable live streaming ecosystem. By refining our operations and consistently developing diverse content categories, we further increased user engagement with high-quality live streaming content. Cost of revenue increased by 11.5% year-on-year in Q1 to RMB 14.8 billion, accounted for 45.4% of total revenue. The increase was mainly due to increased revenue sharing costs and related taxes in line with our revenue growth, partially offset by decreases in depreciation of property and equipment and the right-of-use assets and the modernization of intangible assets. In Q1, gross profit grew by 10.4% year-on-year to RMB 17.8 billion. GP margin was 54.6%, an increase of 0.6% sequentially. Moving to expenses, selling and marketing expenses increased by 5.5% year-on-year to RMB 9.9 billion, accounting for 30.4% of total revenue, dropping from 31.9% in Q1 last year. The increase in selling and marketing expenses was mainly due to increased spending on business promotions, including online marketing services and e-commerce businesses, while the decline as a percentage of total revenue was attributable to our improved operational efficiency. R&D expense was RMB 3.3 billion, rising by 16% year-on-year, accounting for 10.1% of total revenue. Administrative expenses increased by 79.2% year-on-year to RMB 828 million, accounting for 2.5% of total revenue. The increase in R&D and administrative expenses was mainly due to higher employee benefit expenses, including related share-based compensation expenses. Group-level net profit for Q1 was RMB 4 billion. Group-level adjusted net profit rose 4.4% year-on-year to RMB 4.6 billion, with an adjusted net margin of 14%. Our balance sheet remains robust, with cash and cash equivalents, time deposit, restricted cash, and wealth management products totaling RMB 94 billion as of March 31st, 2025. We generated a positive operating net cash flow of RMB 3.3 billion in Q1. Additionally, we actively delivered on our commitment to shareholder returns. By the end of market close today, we repurchased an aggregate of approximately HKD 1.42 billion, or 29.19 million shares, which accounted for about 0.68% of our total shares outstanding within the year 2025. Looking ahead, we will remain focused on our user needs, promoting healthy and prosperous development of our content and business ecosystem. In addition, we will firmly execute our AI strategy and explore diverse growth avenues while fortifying our existing business, driving consistent business development and creating long-term value for users, partners, and shareholders. This concludes our prepared remarks. Operators, please now open the call for questions. [Foreign language] 请自见，再按一自见。如果您需要撤回您的问题，请按请自见。请先用中文提出您的问题，再将您的问题翻译成英文。 We will now begin the question and answer session. If you'd like to ask a question, please press star one and wait for a name to be announced. One moment for the first question. [Foreign language] 第一道问题由来自 UBS 的 Felix Liu。 The first question is come from Felix Liu of UBS. Please go ahead. [Foreign language] 请提问。 好的，谢谢管理层接受我的提问。请管理层能否介绍一下可灵 AI 的商业化变现进展，主要的增长驱动因素是什么？后续可灵 AI 的增长策略是什么？ Thank you, Management, for taking my question. Could Management provide an update on Kling AI's commercialization? What are the main growth drivers, and what is the growth strategy for Kling AI going forward? Thank you. [Foreign language] 对应你的问题，啊，啊，基于全球领先并持续迭代的技术和产品能力，那自今年年初开始，可灵 AI 的商业化变现规模呈现加速的趋势。今年一季度，可灵收入规模已经达到了 RMB 150 million。从收入构成来看，目前 P 端付费订阅会员贡献了接近 70% 的营业收入。那 P 端用户呢，兼具了 C 端用户的传播属性和 B 端用户的付费能力，比如专业的自媒体视频创作者和广告营销从业者等。那目前 P 端付费订阅会员数量和 ARPU 值均呈现较高的增速，双轮驱动可灵 P 端付费订阅收入增长。与此同时，可灵也为超过了 10,000 家企业客户提供了 API 服务，涵盖专业创作平台、广告营销、影视动画、游戏制作和智能终端等多个行业，且企业客户的续费率极高。我们相信可灵 AI 未来会成为更多行业视频创作的新基础设施。 Thank you for your question. Built upon the world's leading continuously iterated technologies with advanced product capabilities, Kling AI's commercialization scale has accelerated since the beginning of this year. In Q1, revenue from Kling AI reached RMB 150 million. In terms of its revenue mix, paid prosumer subscriptions currently account for almost 70% of Kling AI's revenue. Prosumers such as professional independent video creators and advertising and marketing professionals combine the dissemination attributes of individual subscribers with the purchasing power of corporate clients. The number of paid prosumer subscribers and their RPU are increasing rapidly, driving strong growth in prosumer subscription revenue. At the same time, Kling AI provides API services to over 10,000 corporate clients across industries such as professional content creation platforms, advertising and marketing, film and animation, game production, and smart devices, achieving an exceptionally high renewal rate. We believe Kling AI is set to become the new foundational infrastructure for video creation across even more industries going forward. [Foreign language] 今年4月，可灵宣布视频生成技术大模型的升级，并向全球用户推出了可灵 AI 2.0 大师版。可灵 AI 在 2.0 在动态质量、语音响应、画面美学等维度都实现了显著的改善，大幅拉高了视频生成大模型创作能力上限，能够满足专业创作者更复杂的场景使用要求。我们也将于近期推出更多具有性价比优势的版本，为用户提供更加多样的选择，以满足不同用户不同创作需求下的视频制作。 In April this year, we announced a major upgrade to Kling AI's video generation foundation model and launched Kling AI 2.0 Master Edition for global users. Kling AI 2.0 significantly improves motion quality, semantic responsiveness, and visual aesthetics, greatly expanding the upper limit of large video generation models' creation capabilities and meeting the more complex needs of professional creators. We will launch more versions with cost-effective advantages in the near future, providing users a wider range of options to meet diverse video creation needs across various scenarios. [Foreign language] 接下来，我们将通过不断迭代的技术能力和工程创新，保持可灵基座大模型的全球技术领先地位，同时通过产品创新提升用户的使用体验。此外，我们会持续开展相关运营活动，特别是海外区域的运营，实现用户增长。例如，我们突出了 NextGen 新影像创投计划，为兼具内容力和技术力的新锐 AI 机器创作者提供资金支持、全球化的宣发资源、专业 IP 服务化体系和稳定的算力保证。目前，该计划已经取得突破性成果，全球首部 AI 单元聚集《新世界》加载中，先导片已经发布，正片内容也将很快与大家见面。同时，我们也以信息流投放等形式进行营销投放增长，但是这一步的投放规模会相对有限，并且伴随严格的 ROI 考量。 Next, we plan to maintain a global leading position of Kling's foundational model by continuously iterating its technological capabilities and engineering innovation, while enhancing user experience through ongoing product innovation. Additionally, we will continue to carry out relevant operational activities, particularly in overseas regions, to grow our user base. For example, our NextGen New Image Venture Capital plan supports emerging AIGC creators with strong content and technical expertise by offering funding, global promotional resources, professional IP incubation systems, and a stable computing power. The plan has already delivered breakthrough results, with the global premiere of the trailer for the first AI short play series, "New World Is Loading." The full short play will be released soon. Meanwhile, we have also increased the feed ads and other forms of marketing placements, but these will be conducted on a limited scale based on strict ROI considerations. [Foreign language] 总之，可灵 AI 的成功使我们执行聚焦战略的信心更坚定，包括在组织协同、算力、算法提升和数据积累等方面的投入，以保持可灵 AI 的行业优势，并在商业化变现方面实现高速增长。 In summary, Kling AI's success has reinforced our confidence in pursuing our focused strategy, including investments in organizational synergy, computing power, algorithm enhancement, and data accumulation to maintain Kling AI's industry advantages and drive rapid monetization growth. Thank you. [Foreign language] 下一道问题又来自高盛的 Lincoln Kong。 The next question comes from Lincoln Kong of Goldman Sachs. Please go ahead. [Foreign language] 请提问。 好，谢谢管理层接受我的提问。那我的问题是关于这个 AI 怎么去赋能我们这些现有业务的，那就包括对广告、啊，电商等业务的一个赋能。能不能有一些啊，量化的指标，啊，管理层可以跟我们分享。 Thank you, Management, for taking my question. My question is about how AI is empowering companies' existing business, so that includes online marketing service and e-commerce business. Are there any quantitative metrics in this regard that you can share with us? Thank you. [Foreign language] 欢迎你的问题。我们一直致力于 AI 技术与快手现有业务的深度融合。本季度我们也加速了 AI 技术在快手的多个业务场景的渗透。除了此前跟大家介绍的借助大模型进行内容理解和精准推荐，提升用户时长和活跃度外，我们目前也已经在中后台的代码编写和内容审核的多个环节使用了大模型技术。接下来我进一步分享一下 AI 在快手的线上营销和电商业务等场景的赋能情况。 Thank you for your question. We have always been committed to integrating AI through our businesses. In Q1, we stepped up the adoption of AI technology in multiple business scenarios, on top of leveraging large models for content understanding and recommendation accuracy, which increased user time spend and engagement. As we mentioned before, we have also applied large model technology to various aspects of our middle and back offices, including code writing and content review. Next, I'd like to elaborate on how AI is empowering Kuaishou's online marketing and e-commerce business scenarios. [Foreign language] 在线上营销场景，AI 在营销素材生成、营销投放 agent 和营销推荐等环节实现了赋能。在素材生成方面，我们的一站式视频创意生产平台直接开创，通过多模态大模型对海量素材的学习理解，并结合思维链技术归纳总结，形成质量更优的营销素材，能够显著提升营销素材的转化投放率。而数字人直播间女娲在具备 AI 互动能力之后，也大幅提升了客户的直播间转化率。此外，智能客服派在对话流畅度和拟人性上的优化，提升了用户流资转化的效果。第一季度在传统意义上的广告淡季，AIGC 营销素材带来的日均消耗约 RMB 30 million。外循环智能投放产品 UAX 基于大模型推理广告的潜在受众，评估每个素材的广告跑量能力，并结合竞价反馈自动调整投放策略。而内循环全站推广 Agent 4.0 的出价及调价能力，实现了商业化流量和电商流量的一体化，帮助商家获得更多自然流量。在营销推荐方面，大模型深度融合了世界知识和广告领域专业知识，能推理用户的自然行为和广告行为之间的关联，并完成端到端的生成广告，提升营销推荐的精准度和转化效率。 In online marketing scenarios, AI has significantly empowered various aspects, including marketing material production, placement agents, and recommendations. In terms of material production, our one-stop video creative production platform, Magnetic Creator, utilizes multimodal large models to learn and understand from vast amounts of content. By employing chain of thought technology, it generates higher quality marketing materials, leading to a notable increase in conversion rates of marketing placements. Additionally, our digital human live streaming room, Nuwa, has greatly improved the client conversion rates after integrating AI interaction capabilities. Our intelligent customer service system, Pi, is converting more leads by sounding more natural and human. In Q1, during the traditional slow season for online marketing services, average daily spending on AIGC marketing materials reached approximately RMB 30 million. For external marketing services, our smart placement product, UAX, predicts potential audiences for advertisements using large model inference, evaluates the advertising performance of each material, and automatically adjusts the placement strategies based on bidding feedback. For closed-loop marketing services, the Omni-Platform Marketing Agent 4.0's advanced bidding and price adjustment capabilities help merchants capture more organic traffic by integrating online marketing traffic with e-commerce traffic. Regarding marketing recommendations, by deeply integrating global knowledge with advertising expertise, large models can infer the relationships between users' natural behaviors and advertising actions, enabling end-to-end ad production that enhances the accuracy and conversion efficiency of marketing recommendations. [Foreign language] 在电商场景，我们借助 AI 大模型能力，从内容生产、精准匹配和智能客服等层面，帮助提升 3A 经营效率。在内容生产方面，基于大模型视频识别与 DeepSeek 语义文本能力，自动生成直播高光短视频素材，展示商品卖点，帮助商家承接直播长尾流量。2025 年第一季度，AI 自动生成的直播切片日均 GMV 同比增长超过了 300%。在精准匹配方面，结合大模型思维链、跨场景需求预判，自动识别强关联类目和信息标签，让算法更理解用户潜在需求，提升人货匹配效率。在智能客服方面，我们将商家特征、用户行为、历史对话、商品和订单信息、电商规则等信息输入给大模型，并形成智能工作流，快速响应并高效解决用户咨询，实现智能客服解决率提升至 80%。未来，我们有信心通过 AI 潜力的持续释放，助力快手进一步提质增效，特别是为我们的线上营销和电商业务增长带来新增量。届时，我也将跟大家分享更多的进展。 In e-commerce scenarios, we leverage large AI models to enhance merchants' operating efficiencies through content production, precise matching, and intelligent customer service. In terms of content production, leveraging large model video recognition and DeepSeek semantic text capabilities, we automatically generate short video materials from live streaming highlights, showcasing product selling points and helping merchants capture long-tail traffic. In Q1, the average daily GMV of AI-generated live streaming highlights increased by more than 300% year- over- year. For precise matching, our cross-scenario demand predictions utilize large model's chain of thought to automatically identify strongly correlated categories and interest tags, allowing algorithms to better understand users' potential needs and improve user product matching efficiency. For intelligent customer service, we integrate merchant characteristics, user behaviors, historical conversations, product and order details, e-commerce rules, and other information into large models, forming an intelligent workflow that swiftly responds to and efficiently resolves user inquiries, achieving an intelligent customer service resolution rate of up to 80%. Going forward, we are confident that by continuing unlocking AI's potential, we will further improve quality and efficiency, particularly driving incremental growth in our online marketing and e-commerce businesses. I look forward to sharing more updates on our progress with you soon. Thank you for the question. [Foreign language] 下一道问题又来自花旗的 Brian Gong。 The next question comes from Brian Gong from Citi. Please go ahead, Q1. [Foreign language] 好的，谢谢管理层接受我的提问。首先恭喜一季度不错的业绩。就是想问一下，能否请管理层介绍一下近期线上营销服务这边的趋势如何，然后我们看到有哪些行业，哪些 vertical 表现得较好一些。另外也想请教 一下线上营销业务今年的这个主要增长策略是怎么样的。好，谢谢。 I will translate myself. Thanks, Management, for taking my question. Could Management please share the recent trends in online marketing service and which sectors performed better? And also, what could be the key growth strategy for this segment this year? Thank you. [Foreign language] 听的问题。从 4 月线上营销服务整体消耗来看，客户边际投放有所改善，我们也对第二季度线上营销服务同比增速回到双位数保持信心。内循环方面，得益于泛货架场域的投放链路优化以及智能化投放产品，全站推广 4.0 的升级，近期内循环投流商家数同比加速增长。外循环方面，在内容消费行业继续保持高双位数同比增长的同时，本地生活行业的广告消耗有较大幅度提升，而我们认为今年能推动广告业务继续保持高速增长的主要信心，是来自于我们能够帮助更多内容消费行业、电商行业、本地生活行业的客户在平台实现更高效、更长效的经营。 Thank you for the question. In April, we saw a steady pickup in client placements, and we're confident that year-over-year growth rates for online marketing services will return to double digits in the second quarter. For our closed-loop marketing services, the number of merchants accelerated year-over-year recently, thanks to improvements in our pen shelf-based e-commerce sales funnels and upgrades to our Omni-Platform Marketing Agent 4.0. In external marketing services, spending in the content consumption sector continued to grow in the high double digits year-over-year, and in the local services spending, the year-over-year growth rate also increased significantly. We're confident that we can maintain rapid growth this year, mainly by helping more clients in content consumption, e-commerce, and local services operate their businesses more efficiently and sustainably on our platform. [Foreign language] 在内容消费行业，以短剧、小说和小游戏为内容形式的广告素材，不仅能够提供广告变现价值，而且能够让内容和用户产生良好的互动，帮助平台和客户更了解用户，实现广告及内容创作及经营。2024年，我们在短剧行业的消耗实现了超过 300% 的同比增长，今年预计依然能够实现高速增长，同时在小游戏和小说行业也将存在高速增长的机会。今年第一季度小游戏消耗同比增长超过了 30%。除了 UAX 智能投放的渗透赋能外，今年我们还将通过大模型技术实现用户付费节点的动态调整，带来内容消费行业用户的规模化扩张，提升客户的全局收益。 In the content consumption industry, ad materials in the form of role plays, novels, and mini games not only drive monetization; they also align closely with users. This helps both our platform and clients better understand users and achieve the vision of advertising as a form of content and creation as part of operations. In year 2024, marketing spend in the role play industry grew over 300% year-on-year, and we expect it can continue to grow rapidly this year. Mini games and novels are also seeing exciting growth. Q1 marketing spending for mini games rose by more than 30% year-over-year. Beyond smart placement with UAX, this year we will also use large model technology to dynamically adjust the user payment nodes, which can help expand users' and clients' overall revenue in the content consumption industry. [Foreign language] 在电商行业，快手作为流量充沛且在新线城市具有较高渗透率的平台，对于品牌商家拓展具有较强的吸引力，而我们在如何助力商家做内容电商经营、降低经营成本方面，仍有很多可以努力的空间。与此同时，去年一年泛货架 GMV 取得了高速增长，但数据基建和投入链路不畅等因素影响了商家在泛货架场域的广告投放。我们预计自第二季度开始，泛货架场域的广告消耗增长将有一定提速。 In the e-commerce industry, our abundant traffic and high penetration in lower-tier cities are very appealing to brand merchants. While there is still plenty of room to improve how we help merchants build content-driven e-commerce operations and lower their operating costs, meanwhile, pen shelf-based e-commerce GMV has grown rapidly in the past year. Marketing spend was held back by weaker data infrastructure and sales funnel constraints. We expect to see an acceleration in marketing spend in pen shelf-based e-commerce starting in Q2. [Foreign language] 在本地生活行业，在消费结构转型的大背景下，我们观察到有超 7 亿快手用户对于本地生活服务的巨大需求，也为本地生活行业的商家带来了新增量。本地经营的商家按照其在平台的经营诉求可以分为两类：一类是大家传统意义上所理解的本地生活商家，通过直接获得 GMV 成交，例如到餐业务的团购券；另一类商家是在平台获得经营线索，并通过后链路的经营实现转化，例如法律咨询和家居装修行业。今年我们将通过站内原生私信的能力不断优化，提升本地生活商家的复合效率，并借助包括实例开创、数字人直播和智能客服在内的 AIGC 能力，降低商家的经营成本，并带来营销投放的进一步增长. As for the local services industry, a bit of consumption mix transformation, we're seeing rising demand among Kuaishou's over 700 million users. This is opening up new growth opportunities for merchants in this industry. We support two types of local services merchants on our platform: traditional ones focused on increasing GMV, like restaurant group buying, and those focused on lead generation and customer conversion, like in the legal and home renovation service industries. We're improving our native private messaging capabilities on our platform this year by using AIGC tools such as Magnetic Creator, digital human live streaming, and intelligent customer service. We will assist merchants in lowering their operation costs and scaling up their marketing impact. [Foreign language] 总之呢，我们在行业精确化运营、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转化投放。 In summary, we will continue to focus on industry-specific refined operations, intelligent marketing product iterations, and algorithm optimizations to improve clients' marketing conversion. Thank you. [Foreign language] 下一道问题有来自摩根大通的 Daniel Chen。 The next question is come from Daniel Chen from JP Morgan. Please ask your question, Q1. [Foreign language] 谢谢管理层给我机会问问题。那个，我想问一个电商这块的问题。那个，今年的 618 大促已经开始了，能不能分享一下我们今年的主要策略，然后跟往年相比有什么亮点？同时也可以请分享一下这个我们的这个商城这个业务在下一个阶段的发展策略，谢谢。 So my question is related to e-commerce. This year's 618 Shopping Festival has already begun. Could you share the main strategy for this year? Also, what's the highlight compared to previous years? Also please share the development strategy for the shopping more feature in the next stage. Thank you. [Foreign language] 经营的问题。在当前消费需求挑战仍存的大背景下，我们对今年的 618 的打法做了更多的创新，以帮助商达充分把握全域经营的新机遇。618 大促期间，我们会提供千亿流量和 20 亿补贴，并从用户、商品和商达这三个维度推出创新策略打法。 Thank you for the question. Amid ongoing challenges in consumer demand, we have introduced more strategic initiatives for this year's 618 Shopping Festival to help merchants and KOLs fully harness the new opportunities in omni-domain operations. During the 618 Shopping Festival, we will provide RMB 100 billion in traffic resources and RMB 2 billion in subsidies, and launch innovative strategies across three dimensions: users, products, and merchants and KOLs. [Foreign language] 首先是用户维度，我们通过大促预热期平台蓄水和比主播预约相结合，通过关注秒杀的活动提前锁定一部分用户需求，在大促增值期加大用户激活召回力度，叠加平台大额补贴、抽免单等营销工具，提升用户转化率和购买力，实现公域拓新和私域升更，促进用户规模提升。其次是商品维度，我们会聚焦全网新品，大促爆款品、大促新制品和日常畅销品则是盘好货的特点，匹配对应的推广策略和扶持资源，比如有价格竞争力的大促爆品，可以通过超级链接爆品计划的平台补贴与达人撮合，让好货不愁卖。最后在商达维度，我们面向头部、腰部和潜力主播制定了针对性分层扶持方案，通过拓宽货盘，让商品类目更丰富，价格更有竞争力。同时针对大厂主播、高潜主播，分别推出了主播争霸赛、挑战赛、整点红包鱼等流量扶持，更可以通过短资联动、直播爆款挂电等跨场域经营模式，激活全域的成交潜力。 First, on the user front, we're combining pre-sale promotions with reservations for live streaming to lock in early demand through follows and flash sales. During the official promotion period, we will step up efforts to activate and re-engage users through marketing tools such as large subsidies and pre-order promotions to boost conversion and purchasing power. This will allow us to gain new users in the public domain and deepen engagement in the private domain. Second, on the product side, we are tailoring strategies for four key product types: new launches, promotion blockbusters, high-interest promotion products, and everyday bestsellers. For example, blockbuster items with strong price appeal will get support from platform subsidies, special promotions like the blockbuster initiative and the KOL matchmaking to help sell through. Finally, for merchants and KOLs, we have developed targeted tiered support plans based on KOL scale and potential: top tier, mid-level, and emerging talent. We have also expanded product variety and improved pricing to stay competitive. On the traffic side, we have launched programs such as streamer competitions, challenges, and hourly subsidy to help large-scale and high-potential streamers break out. By combining short videos with live streaming and adding shopping links to popular live streaming sessions for blockbusters, we will further stimulate omni-domain transaction opportunities across the platform. [Foreign language] 对于快手商城业务，目前已经发展成为了快手电商业务的重要场域。接下来我们将在商城运营中针对不同类型的商家推出差异化的运营策略。一方面，对于运营资源有限或新进入快手经营的商家，我们的营销托管提供智能 AI 素材优化、商品免费流量扶持、营销活动代报和爆品保护机制等多元化服务。举例来说，素材作为影像商品卡点击转化率最重要的因素之一，我们可以利用 AI 赋能，帮助商家针对标题、图片、视频等多个维度进行素材优化，保证商品在货架场域分发的信息效率。另一方面，对于运营资源充沛的商家或者在快手有一定经营经验的商家，我们在商城的大开大补、低价特卖等官方营销渠道提供专属的渠道流量、营销标签以及额外的流量扶持。同时，超级链接作为今年商城的重点方向之一，通过平台创建商品链接，叠加额外补贴并积累用户资产。目前超级链接的商品转化率可达普通商品的近 5 倍。 Our shopping mall has become an important growth driver of Kuaishou's e-commerce business. To build on this, we will launch tailored operational strategies for different types of merchants. For merchants with limited operational resources or who have been newly on board, we will provide diverse marketing hosting services such as AI-powered material optimization, free traffic support for products, marketing activity registration, and blockbuster protection mechanisms. For example, since product visuals and descriptions directly impact the click-through and conversion rates, our AI helps merchants improve material quality such as titles, images, and videos, ensuring the efficiency of information distribution for shelf-based shopping scenarios. For more experienced or operationally resourced merchants on Kuaishou, we will provide exclusive traffic channels, marketing tags, and extra exposure in the shopping mall through official marketing channels such as big brand, big subsidy, and special sale. One major initiative this year is our Super Links, which create links to goods, stack additional subsidies, and accumulate user assets through the platform. As a result, conversion rates for Super Linked products are nearly five times higher than regular ones. [Foreign language] 总之呢，快手电商将持续发挥全域经营优势，丰富细分类目商品供给，跨场域满足用户多元化消费需求。同时充分利用 AI 能力，赋能商家的全链路经营，通过 AIGC 内容生产、精准投放、智能客服等降低商家的经营成本。我们非常有信心助力更多商家在大促期间实现爆发，实现业务规模与经营质量的稳健提升。 In conclusion, Kuaishou e-commerce will continue to leverage its omni-domain operational advantages, enrich category-specific product supply, meet users' diversified consumption needs across different scenarios, and fully utilize AI capabilities to empower merchants in their end-to-end operations. We aim to reduce merchants' operating costs through features such as AIGC content production, accurate placement, and intelligent customer service. We are very confident we can help more merchants achieve explosive growth through our major promotions, improving their business scale and operational quality. Thank you, operator. Next question, please. [Foreign language] 下一道问题有来自 CICC 的张雪琴。 The next question comes from Xueqing Zhang of CICC. Please ask your question, Q1. [Foreign language] 谢谢管理层接受我提问。那想请管理层分享一下 AI 今年的投入以及对集团全年盈利能力的影响是如何的。 Thanks, management, for taking my question. Could management share more about the investment plan on AI this year and its impacts on the full year profitability? Thank you. [Foreign language] 谢谢你的问题。关于 AI 的投入，首先是可灵。正如刚才肖总所讲，Kling AI 在一季度取得了超预期的收入进展。4 月 2.0 的版本推出以后呢，受到了国内外创作者的广泛好评，特别是能够解决专业创作者更为复杂的创作需求。同时，目前 Kling AI 为创作者提供了多个版本的选择，以满足用户不同创作需求和场景下的视频制作。Kling AI 全球领先的技术和产品能力确保了我们在商业化变现上能够不断提速。我们也有信心持续保持领先行业的收入增速。 Thank you for your question. Regarding our investments in AI, let me start with Kling AI, as just mentioned by Yixiao. Kling AI achieved a better-than-expected revenue scale in Q1. Since Kling AI 2.0 launched in April, it received widespread acclaim from creators both domestically and internationally, especially for its ability to address the more complex creative needs of professional creators. Meanwhile, we have multiple Kling AI versions for creators to address their different creative needs and video production scenarios. Kling AI's world-leading technology and product capabilities ensure we can continuously accelerate our commercialization, and we're confident that we can maintain this industry-leading revenue growth rate. [Foreign language] 关于 AI 对公司盈利能力的影响，我们会在 AI 相关的费用支出方面有所增加。例如，相关的研发人员成本，我们预计同比会有一定程度的增加，主要用于 AI 技术人才的吸引、保留和团队建设。因为可灵 AI 已经在推理层面实现了边际利润达阵，随着业务规模的扩张，即便我们追加投入推理算力，对于集团利润的影响也会比较小。同时，我们也非常有信心通过技术的迭代，实现推理成本的进一步下降。随着营业收入规模的扩张，对训练成本和人力成本的固定性质成本的摊薄，可灵 AI 的整体亏损和亏损率都会缩窄。从全年来看，AI 战略包括可灵对于集团的整体利润率的影响会在 1-2 个百分点的范围。而中长期来看，我们相信 AI 能够成为公司的第二增长曲线之一，为公司贡献营收和利润，也为股东创造更多的价值。 Regarding AI's impact on our profitability, we anticipate expenditure in AI-related areas will increase, particularly in R&D personnel costs. We expect a year-over-year rise in these expenses, primarily allocated to attracting and retaining top AI talent, as well as team capacity building. Kling AI has already generated a positive marginal profit at the inference level. Even if we scale up and invest more in inference computing power, the impact on our bottom line will be relatively small. We're also very confident that through technological iteration, we can bring inference costs down even further. As our revenue grows and fixed costs like training and labor are spread out more, Kling AI's overall losses and loss margin will continue to narrow. For the full year of 2025, our AI investment, including Kling AI, the impact on the group's overall profit margin will be among 1%-2%. In the medium to long term, we believe AI can become one of the second growth curves of the company, contributing to both our top line and bottom line, creating more value for shareholders. Thank you. That's the end of the QA session. Back to you, operator. [Foreign language] 今天的会报告环节到此结束。现在有请 Matthew 做总结性发言。 感谢大家今天的参与。如果您还有更多问题，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 further questions, please contact our Capital Market and Investor Relations team at any time. Thank you.