Good day and a good evening. Thank you for standing by. Welcome to Tencent Holdings Limited 2025 second quarter results announcement webinar. I'm Wendy Huang from Tencent IR team. At this time, all participants are in a listen-only mode. After the management's presentation, there will be a question and answer session. For participants who dialed in by phone, if you wish to ask a question, please press five on your telephone to raise your hand. If you are accessing from the Tencent Meeting or Google Meet application, please click the raise hand button at the bottom left. Please be advised that today's webinar is being recorded. Before we start the presentation, we would like to remind you that it includes forward-looking statements, which are underlined by a number of risks and uncertainties, and may not be realized in the future for various reasons. Information about general market conditions is coming from a variety of sources outside of Tencent. This presentation also contains some unaudited non-IFRS financial measures that should be considered in addition to, but not as a substitute for, measures of the group's financial performance prepared in accordance with IFRS. For a detailed discussion of risk factors and non-IFRS measures, please refer to our disclosure documents on the IR section of our website. Now, let me introduce the management team on the webinar tonight. Our Chairman and CEO, Pony Ma, will kick off with a short overview. President Martin Lau and Chief Strategy Officer James Mitchell will provide a business review. Chief Financial Officer John Lo will conclude with a financial discussion before we open the floor for questions. I will now pass it to Pony. Thank you, Wendy. Good evening. Thank you, everyone, for joining us. During the second quarter of 2025, we delivered a double-digit revenue and non-IFRS operating profit growth. As we invest in and also benefit from utilizing AI, our games performed well in terms of users and revenue. As evergreen games such as Honor of Kings and Peacekeeper Elite evolved into platforms while increasing their usage of AI, and as new games such as Delta Force broke out, our marketing services revenue sustained rapid growth as we upgraded our advertising foundation model, leading to a better performance on the edge across our traffic platforms. We are striving to bring further benefits of AI to consumers and enterprises through powering more use cases within Weixin and driving usage of our AI-native app Yuanbao and upgrading the capabilities of our Hunyuan foundation models. Looking at our financial numbers for the second quarter, total revenue was RMB 185 billion, up 15% year-on-year. Gross profit was RMB 105 billion, up 22% year-on-year. Non-IFRS operating profit was RMB 69 billion, up 82% year-on-year. Non-IFRS net profit attributable to equity holders was RMB 63 billion, up 10% year-on-year. If we exclude the associated profit contribution from the current quarter and from the same quarter last year, when associated profit was high due to better productivity and catch-up adjustments for a large associate, our underlying net profit would have increased by 20% year-on-year. Turning to our key services, for communication and social networks, combined MAU of Weixin and WeChat grew year-on-year and quarter-on-quarter to 1.4 billion. For digital content, TME solidified its leadership position in music streaming. For games, we extend our leadership position with the progress in gameplay-centric games such as Peacekeeper Elite and Delta Force, as well as in content-centric games such as Naruto and Wuthering Waves. For cloud, Gartner has recognized Tencent Cloud as one of the top communication platform-as-a-service solutions globally for three consecutive years. I will now hand over to Martin for a business review. Thank you, Pony. Good evening and good morning to everybody. For the second quarter of 2025, our total revenue was up 15% year-on-year. That represented 50% of our total revenue, within which the social networks subsegment was 18%, domestic games subsegment was 22%, and international games was 10%. Marketing services was 19% of total revenue. Fintech and business services was 30% of total revenue. In terms of gross profit, our gross profit was up 22% year-on-year in the second quarter to RMB 105 billion. Relatively, gross profit for each of our three reporting segments grew over 20% year-on-year. That gross profit increased 23% year-on-year to RMB 55 billion, representing 53% of our total gross profit. Marketing services gross profit increased 24% year-on-year to RMB 21 billion, contributing 20% of total gross profit. Fintech and business services gross profit increased 21% year-on-year to RMB 29 billion, contributing 28% of our total gross profit. Turning to business segments, Value-Added Services revenue was RMB 91 billion, up 16% year-on-year. Social networks revenue was up 6% year-on-year, driven by increased revenue from app-based game item sales, video accounts like streaming service, and music subscriptions. Music subscription revenue increased 17% year-on-year, supported by growth in Apple, as well as subscribers. Overall subscriber grew 6% year-on-year to 124 million. Our Super VIP subscribers exceeded 15 million, benefiting from privileges such as collectible artist cards and expanded early access to merchandise and live events. Long-form video subscription revenue decreased 2% year-on-year. Video subscribers declined 3% year-on-year to 114 million due to fewer scheduled releases of top-tier content. Despite a light release quarter, our self-commissioned drama series, The Prisoner of Beauty, was the most watched drama series across all long-form video platforms on Friday night. Domestic games revenue grew by 17% year-on-year, driven by growth contributions from Delta Force and from evergreen games, notably Honor of Kings, VALORANT, and Peacekeeper Elite. International games revenue increased by 35% year-on-year, or 33% in constant currency terms, driven by Supercell's games, PUBG Mobile, and the release of Dune: Awakening. Now, moving on to communications and social networks, mini programs increasingly act as a powerful platform for users to connect with merchants and content providers. TME, facilitated by mini programs, grew by a teens percentage year-on-year in the second quarter, benefiting from improved support for use cases, including financial services, dine-in ordering, and transportation. For mini games, the total gross receipt increased 20% year-on-year. We upgraded mini games' technology infrastructure with expanded game engine compatibility, enhanced graphics rendering, and reduced load time, which together facilitate developers importing complex app-based games to mini games. These games include simulation and MMORPGs. For mini shops, we allowed brands and merchants to port their SKU libraries from mini programs to mini shops and to unify loyalty programs across two platforms. In addition, we continued to strengthen the social commerce experience, which distinguishes Weixin from traditional e-commerce platforms. First, we extended gifting features from mini shops to mini programs, video accounts, and official accounts. Second, we introduced the shop with friends feature, encouraging users to share products and shops they like with friends via chats and moments and participate together in group discount deals. On the AI front, we added AI-powered citation to content so that users reading official accounts, articles, or video accounts comments can activate contextual AI commentary on related information. We upgraded mini shops' customer service with large language model capabilities to provide merchants with more intelligent responses to customer inquiries and personalized product recommendations. We enabled Yuanbao as a Weixin contact to interpret and summarize video accounts' content. Meanwhile, we are rapidly enhancing the functionalities of our AI-native app, Yuanbao, and we'll share more details about how we are growing with DAU later this year. With that, I'm passing it on to James. Thank you, Martin. Moving to domestic games, Delta Force has grown to be among the top five games by DAU and top three games by gross receipts market-wide in China in July. The game's advanced architecture and modular design enable us to rapidly introduce new features, such as underwater combat and a dynamic weather system. Delta Force's monthly average DAU has been trending up in recent months, reaching a record high of over 20 million in July. Several of our existing evergreen titles demonstrated vitality in terms of user engagement as well as revenues. For example, Peacekeeper Elite increased average DAU by more than 30% year-on-year in the quarter due to the rising popularity of its extraction shooter mode. VALORANT China achieved record-high average DAU in the second quarter, benefiting from eSports tournaments and a new larger-scale map for road. VALORANT Mobile will launch next week in China, extending the game's presence from PC, PlayStation, and Xbox to mobile. Reviewing the progress of our game business domestically and internationally in recent months, AI has become an increasingly important driver of its growth in terms of game content, game engagement, and game monetization. We're increasingly applying AI tools to boost the speed and scale of content production across our major games. AI allows us to provide more human-like virtual teammates in our competitive PvP games and to power more realistic non-player characters in our story-driven PvE games. We're using AI in our game marketing activities to more efficiently target marketing spending toward the users most likely to activate and remain in each game. On international games, for PUBG Mobile, a rising percentage of DAU are playing user-generated experiences in the World of Wonder sandbox. The popularity of the metro extraction shooter mode and now the World of Wonder user-generated content environment demonstrate our progress in upgrading PUBG Mobile from a game as a service to a game as a platform. Monthly gross receipts of PUBG Mobile reached a record high level in April, driven by the drops of ancient Egyptian-themed outfits. For Clash Royale, Supercell has accelerated the cadence of content updates and of community events and optimized the reward system, resulting in more attention from live streaming influencers and higher DAU counts. Clash Royale monthly gross receipts hit a seven-year high in June. Dune: Awakening, an open-world survival game developed and published by our Norwegian subsidiary Funcom, launched in early June. The game was the highest-ranked pay-to-earn game by revenue on Steam worldwide for the first week of its launch. Fans of survival games and of the Dune novels are responding very favorably to the game, and Funcom has a substantial content pipeline to sustain and expand the game world. For marketing services, revenue grew 20% year-on-year to RMB 36 billion for the quarter, benefiting from AI-powered ad tech upgrades and from influencers' loop advertising arising from Weixin's transactional ecosystem. We expanded AI capabilities in areas including ad creation, placement, recommendation, and performance analysis, which had the effect of boosting click-through rates, conversions, and ROI for advertisers. Specifically, we upgraded our ad platform architecture by deploying a scaled-up foundation model, which analyzes advertisement click-through rates and transactions across multiple apps and services, as well as user interactions across text, image, and video to determine user interest and optimize ad performance in real time. By property, video accounts' marketing services revenue rose approximately 50% year-on-year due to more traffic and more transactional activity within video accounts. Mini programs' marketing services revenue also increased about 50% year-on-year. Activity within mini games and mini dramas created a flywheel effect, which drives more developers to use our closed-loop marketing solutions to promote their services. Weixin's search revenue grew around 60% year-on-year due to more consumer and advertiser interest in mini program search results and to enhanced ad relevance as we leveraged our large language model to deepen our understanding of merchandise and of user consumption intent. Looking at fintech and business services, segment revenue was RMB 56 billion, up 10% year-on-year. Fintech services revenue growth increased to a high single-digit percentage year-on-year, primarily driven by commercial payment services and consumer loan services. For commercial payment services, payment volume turned positive year-on-year in the second quarter as the decline in value per transaction narrowed and the number of transactions grew at a faster rate versus prior quarters. Online total payment volume sustained a healthy growth rate, while the previously weak offline total payment volume trend improved due to increased spending in categories such as retail and dining services. Business services revenue grew at a teens rate year-on-year. Cloud services revenue growth accelerated versus recent quarters, benefiting from increased revenue from providing GPUs and API tokens for customers' AI needs. These collected on mini shops' transactions continue to grow at a rapid rate, and business services gross margin rose year-on-year due to improved efficiency and positive mix-shifts. Our international cloud revenue increased significantly year-on-year. We are increasingly proficient in helping large international clients migrate to Tencent Cloud and so uplift their IT efficiency. For example, we facilitated Gojek Tokopedia Group's on-demand service systems migration, one of the most complex cloud migrations in Southeast Asia. For Hunyuan, we enhanced our data quality and diversity through data augmentation and synthesis and implemented more effective pre-training and post-training scaling. Our Hunyuan 3D model has become the top-ranked 3D generative model on Hugging Face due to its geometric precision, texture fidelity, and prompt 3D alignment capabilities. Game developers, 3D printing enterprises, and design professionals are increasingly using the Hunyuan 3D model for their digital asset generation needs. I'll now pass to John to discuss the financial review. Thank you, James. For the second quarter of 2025, total revenue was RMB 184.5 billion, up 15% year-on-year. Gross profit was RMB 105 billion, up 22% year-on-year. Other loss was RMB 3.6 billion compared to the gain of RMB 1.5 billion in the same period last year, mainly due to lower subsidies and tax rebates, as well as provisions paid for some receivables during the quarter. Operating profit was RMB 60.1 billion, up 18% year-on-year. Interest income was RMB 4.1 billion, up 7% year-on-year. Finance costs were RMB 3.9 billion, up 27% year-on-year due to higher interest expenses and increased foreign exchange losses. Share profit of associates and joint ventures was RMB 4.5 billion compared to RMB 7.7 billion in the same quarter last year. On a non-IFRS basis, share profit was RMB 6.3 billion, down from RMB 9.9 billion in the same quarter last year, primarily due to low estimated associate income from a large associate. Income tax expense increased by 12% year-on-year to RMB 11.4 billion, driven by growth in operating profit. On a non-IFRS basis, diluted EPS was RMB 6.793, up 13% year-on-year, outpacing non-IFRS net profit growth due to reduced share count after our share buybacks. Our weighted average number of shares for calculating diluted EPS decreased 2% year-on-year. On non-IFRS financial figures, operating profit was RMB 69.2 billion, up 18% year-on-year. Net profit attributable to equity holders was RMB 63.1 billion, up 10% year-on-year. Excluding associate and JV profit contribution in both the current quarter and the same quarter last year, our net profit would have increased by 20% year-on-year to RMB 56.8 billion. Moving on to gross margins, overall gross margin was 57%, up 4 percentage points year-on-year. By segment, VAS gross margin was 60%, up 3 percentage points year-on-year, primarily driven by a higher mix of high margin domestic games revenue alongside market expansion in our music subscription services, driven by growth in Apple and subscribers, as mentioned earlier. Marketing services gross margin was 58%, up 2 percentage points year-on-year, supported by growth in high margin video accounts and Weixin Search revenue. Fintech and business services gross margin was 52%, up 5 percentage points year-on-year, mainly due to favorable revenue mix-shift to wealth management and consumer loan services and improved cost efficiency in our payment and cloud services. On second quarter operating expenses, selling and marketing expenses were RMB 9.4 billion, up 3% year-on-year, reflecting promotional efforts to support the growth of our AI-native applications. Selling and marketing expenses represented 5% of revenue, down from 5.6% in the same quarter last year. R&D expenses rose by 17% year-on-year to RMB 20.3 billion, reflecting higher efforts and increased investment to support our AI-native applications. G&A, excluding R&D expenses, increased by 0.2% year-on-year to RMB 11.6 billion due to high effort, including performance-based rewards and certain overseas subsidiaries. At quarter end, we had approximately 111,000 employees, up 5% year-on-year, or 2% quarter-on-quarter, driven by fresh graduate hires. Our second quarter non-IFRS operating margin was 38%, up 1 percentage point year-on-year. To conclude, I will highlight some key cash flow and balance sheet metrics. Operating CapEx was RMB 17.9 billion, up 149% year-on-year, driven by increased investments in GPUs and servers to ramp up our AI capabilities. Non-operating CapEx was RMB 1.2 billion, down 20% year-on-year. Our total CapEx was RMB 19.1 billion, up 119% year-on-year. Free cash flow was RMB 43 billion, up 7% year-on-year, driven by growth in games gross receipts. On a quarter-on-quarter basis, free cash flow was down 9% due to seasonally lower games gross receipts following the Spring Festival period. Net cash position was RMB 74.6 billion, down 17% quarter-on-quarter, or RMB 15.6 billion, primarily due to final dividend payments of RMB 37.5 billion for the financial year 2024. Thank you. Thank you, John. We shall now open the floor for questions. We will take the first question from Thomas Chong from Jefferies. Hi, good evening. Thanks, management, for taking my question and congratulations on a very strong set of results. My question is about advertising. We have seen Tencent and other overseas peers using AI in driving ad revenue growth. Can management comment about the potential for marketing services over the next few quarters and coming years? In terms of ad growth driver, how should we think about traffic, click-through rate, and ad load for video accounts? Thank you. Thank you, Thomas. On the advertising and the potential, we continue to believe that we enjoy a long and a lengthening runway for continuing to grow our advertising revenue at a reasonably healthy rate. That length of the runway reflects upside in a number of the key variables that determine our marketing services revenue, including the click-through rate, where AI delivers better targeting and thus more clicks, including traffic, where we see growth in video accounts traffic and search traffic over time in traffic within our AI-native experiences, including revenue per click as generative AI used for creating the ads results in more ad demand, as well as e-commerce closed-loop transactions resulting in more ad demand. Finally, in ad load, where, as you know, for short video, our ad load is currently in the low to mid-single digits versus our peers who are in the low to mid-teens. Those are the reasons we believe there's a long runway for growth for our advertising revenue. In terms of prioritizing between the drivers, in the second quarter, the majority of the advertising revenue growth, 20% year-on-year, arose from a higher revenue per impression. That, in turn, was primarily due to a higher click-through rate arising from deploying AI, although also to higher revenue per click arising from more closed-loop activity with mini shops and mini games. A lesser driver was more impressions arising primarily from video accounts traffic growth and search traffic growth, while ad load was not really a driver. Those were the drivers in the second quarter. Thank you. Thank you. Thank you, Thomas. We will take the next question from Alex Yao from JPMorgan. Thank you, management, for taking my question. The first question is, you guys have been integrating more and more AI features to a large number of mobile internet applications this year, aside from launching native Gen AI applications such as Yuanbao. What's your observation of a consumer behavior change when they use these AI-enabled mobile internet applications? Could these consumer behavior changes affect the mobile internet ecosystem? For instance, if people use too much AI search, they will bypass the website or the public account and just directly consume the content in the AI summary, which could potentially affect the mobile internet ecosystem. My follow-up question is, as you guys continue to offer increasingly more AI features to consumers free of charge, the delivery of these AI features is a lot more expensive than mobile internet services, which will potentially hurt Tencent's cost structure. Will management consider starting to directly monetize these consumer-facing AI features in the next one or two years? If so, what AI features or functions are most monetizable? Thank you. First of all, in terms of the AI features, I think there is, broadly speaking, a number of these features. One is obviously our Yuanbao, which is an AI-native app. I would say it's related to search, AI-enabled search, so that lands on our browser, that also lands on WeChat Search. There is a whole host of different features within even games, when we have AI-enabled players or in our productivity tools, for example, summary of meetings in our Tencent Meeting and assistance within our Tencent Docs to help people to write. I would say we're still at an early stage in observing the user behavior. Obviously, when users use these, I think they tend to be more satisfied if they tend to have higher efficiency in creating the kind of content and getting to the content that they want. I think it's an improvement in terms of the user experience. In terms of whether it's really going to hurt the search, I think that the one negative impact that you are pointing to is when there is AI-assisted search, whether it would just show the content rather than leading people to the pages. We have not seen a very big impact on that. I think, overall, people tend to be more satisfied in getting the answer directly. If they want to explore the topic more, they would click on the different links and articles. I think, overall, it's actually not that much of an impact. At the same time, if you look at the ecosystem within Weixin, the content ecosystem, a lot of the page views is actually from non-search-related origins. When people subscribe to a writer's content, then that's most of the viewership is actually based on points. In terms of the impact on specific authors, I think that impact is minimal at this point in time. In terms of your question about the cost, I think we are actually managing the cost in a relatively granular way. I think there are a lot of phases in which if we can use smaller models, we'll be using smaller models, and the cost will be much lower than using the flagship model. In a lot of these use cases, the cost is manageable if we can use smaller models. At the same time, if we continue to improve the efficiency of inference through software upgrades. As it relates to whether we would be monetizing eventually, I think eventually there should be some monetization. I think in China, in reality, it's actually very hard to use the user-paid model, which now populates the U.S. AI tools. I think, over time, we'll try to figure out whether there will be some app-supported way of monetizing. At the same time, I want to point out that AI is already contributing to the growth and monetization of our existing businesses in different ways, right? Somehow, we could also fund part of this political subsidy for AI usage by the users through the growth in our other businesses. Thank you, Alex. We will take the next question from Robin Zhu from Bernstein. Thanks, Pony. Can you hear me? Go ahead. Cool. I guess a couple of questions on gaming. I think we're seeing the start of a very successful start to life for Delta Force. I was wondering if management could share the views on AAA gaming growth in China, including on PC, maybe consoles, whether this is the start of a new market for your business, or does it replace parts of the current markets? A second question on capital allocation on AI. What's the argument against potentially allocating a lot more capital to create new dominant top funnels in Yuanbao, IMA, or some of the other stuff that we're doing, as opposed to the kind of more gradual approach that we're taking now? Thank you. Thank you, Robin, for your question. To confirm, the first question is about AAA games, not about Delta Force. Is that right? Yeah, about the market opportunity, I guess, illustrated by Delta Force growing a lot. We would define AAA games as pay-to-earn games, such as Black Myth: Wukong, versus we would define Delta Force as more of a live game or game as a service. We're optimistic about both, but we think that the majority of the market in China today and for the future is live service games such as Delta Force. Delta Force is gratifying for us, not so much because it's top three this and top five that, but more because having launched at a certain scale, it's actually been progressively growing in the nine or so months since its launch in terms of both users and revenue, which is exactly what we want to see from our evergreen game strategy. That persistent growth, we think, demonstrates our ability to produce high-quality game content at scale, which spans three modes within Delta Force, two platforms, three platforms as of tomorrow when it moves to console, as well as both China and international markets. We're able to do that because of the quality of our developers, the capabilities of our tools, and our production process, which includes AI. Very happy with Delta Force. In terms of AAA or pay-to-earn games, there is an increasing audience for such games in China. We think that where people release excellent AAA games, they have the potential to be solidly profitable. The bar to being excellent is very high. We think AAA games or pay-to-earn games will remain a minority of the China market, given gamers are accustomed to free-to-play games. The emergence of AAA in China provides a really good opportunity for passion projects that would otherwise be not economical to become economically feasible without needing to provide live content and ongoing services for 10 years or more. In terms of whether those AAA games growing as cannibalistic of the live service games, we're very confident that that's not the case and they're complementary. If you look at Tencent Music as an analogy, it has 100 and something million people subscribing to the core music streaming service. Some subset of them will periodically buy digital albums. That spending on digital albums is supplementary. It's not cannibalistic to the original subscription, the mainstream subscription monetization. We think the same thing would be true here, that the people who purchase the AAA games will overwhelmingly be people who are already playing live service games or continue to play and spend money on live service games. Once every so often, if there's an excellent product like Black Myth: Wukong, they'll purchase those AAA games as well. That's on the game question. In terms of the AI spending, I would have to say we have been spending quite a bit, and we are also increasing our spending and will be spending more as we go along. That is sort of already happening. At the same time, we also have to be spending smartly rather than just sort of saying, oh, we're going to go all in and spend on buying a lot of chips and hiring a lot of people and doing a lot of marketing. I think we have to spend in the right tempo. In particular, when you look at the two products you mentioned, for example, IMA is right now an innovative product, and there is not that much of an example of this product. It is right now in the process of figuring out the optimal product offering and use case. Before we do that, I do not think we should be piling in on marketing expenses of that product. Yuanbao is a more mature product. There is a very clear product use case. We have been spending quite a bit in promoting the product, especially in the first quarter. On the back of that spending, we have actually grown the user base quite a bit. I think the second quarter is really about improving the product so that we can actually retain the large user base that we have acquired and give them a great user experience. As we have been able to do that, then likely we are going to be ramping up the promotion again. The promotion is not going to be all just spending money in acquiring users in the market because bear in mind, we actually have a lot of existing platforms that we can leverage. I think integrating Yuanbao with our existing platforms is actually a very important advantage and leverage that we have. We are going to be doing a lot more of that in the coming months, in addition to starting to ramp up the promotion of this product. Thank you very much. Thank you, Robin. We will take the next question from Kenneth Fong from UBS. All right. Good evening, management. Thanks for taking my question. I have a question about the impact on the new advertising law for gaming companies' sales and marketing. Under the new ad regulation effective in July, sales and marketing spending in excess of 15% of revenue will need to pay an additional 25% tax. How do you expect this to affect our advertising income, especially for mini games, which heavily rely on traffic acquisitions, i.e., the sales and marketing could easily surpass this 15% revenue threshold? Thank you. Hi, Kenneth. We don't expect a meaningful impact. Our advertising business has become quite broad-based over time. If you look at the second quarter, there was an adverse impact from the food delivery companies and some of the e-commerce companies ramping up in food delivery, reducing their advertising spend as they invested more in subsidies. Despite that, our advertising revenue grew 20% year-on-year. In our view, there's always going to be individual blips up and down in terms of individual categories. What we're doing in terms of deploying AI within advertising is a much more important variable. Thank you. Thank you, Kenneth. We will take the next question from Alicia Yap from Citi. Hi. Good evening, management. Thanks for taking my questions. I have two questions. First, regarding management comment on the business services revenue growth, see acceleration this quarter benefiting from the increasing enterprise demand for the GPU rental and also the API token usage. Now that we actually have started to see fluctuations from our internal utilizations of the AI in our internal application, will Tencent start to allocate more GPU resources to support the growing demand of the external enterprise customer? If so, could we actually see potential continual accelerations of the business services revenue line in the coming quarters? Second question is follow-up on the advertising. Obviously, with the upgrade on the foundation model and also the expansions of the AI capabilities, I recall management mentioned about last quarter when we achieved that 20% year-over-year growth in the marketing service line is more reaching the upper band of the growth range. Because of this whole AI enhancement, could that 20% becoming the new base and being the lower band of the growth range in the coming quarters if the AI technology continues to drive better conversion and the eCPM improvement, especially we actually have a relatively lower ad loads versus the peers? Hi, Alicia. Let me take a stab at both of those. With our business services revenue growth, we did see more revenue related to GPU and API token rental. We also saw broad base growth. We feel that in the last two to three years, we've effectively debugged our cloud business by scaling back and sometimes exiting from low margin and low value add activities. Now that we've put our cloud business onto a more sustainable base, as well as improved the cost competitiveness of the supply chain for our cloud business, we are refocusing on growing revenue at an accelerated rate versus the prior rate without depending too much on the vagaries of the GPU supply situation. If we do have sufficient GPUs that we can rent out more in the cloud, then we'll do so. Our cloud strategy is not dependent on the GPUs. We're also growing in CPU, in storage, in database, in CDN, and so forth. That's on the cloud side. In terms of your question around advertising, I'd say that we're comfortable with the growth rates that we're delivering. There's no change in our philosophy at this point in time. We're focused on really elongating the runway for growth. Of course, if the cost of deploying AI, including GPU depreciation, were suddenly to step up and become very burdensome, we could accelerate the advertising monetization. We don't see the need to do that right now. Thank you. Thank you. Thank you, Alicia. We will take the next question from Ronald Keung from Goldman. Thank you, Pony, Martin, James, John, and Wendy. Maybe a first question on games. With this expanding evergreen game titles, we obviously have a very strong pipeline. Is it fair to say we are moving towards an overall platform now with increased stability, decreased single title volatility? How should we think about a normalized growth rate for the overall gaming business from here, whether it's from a market share or number of gamers or app group potentials? A second question on just AI models. I want to hear what are the next priorities for the Hunyuan model family, especially as we're seeing some closing of gaps between Chinese models versus state-of-the-art global leading models. With this improvement, we see kind of increased emphasis now from a multimodal perspective. We mentioned about 3D and agent capabilities. I want to hear what are we thinking about the agent potentials, particularly in Hunyuan and into WeChat. Thank you. Hi, Ronald. Thank you for the question. On games, I think your broad observation is correct that as our game portfolio broadens out and becomes more platform-like in nature, we should expect less volatility in the overall game revenue growth. Of course, each game is still a creative endeavor, and individual games may have stronger seasons and weaker seasons. What we can see is that as long as the games are best in class and we nurture and support them, they can tolerate a weaker season. The development team makes some changes, and the users and the revenue bounce back in a stronger season. Sometimes, with a game like Fight for the Golden Spatula that requires a season, it might be two months. Other times, if you look at the Supercell games, Brawl Stars went somewhat quiet for four years before having a big recovery 18 months ago. Clash Royale actually was rather quiet for seven years and now is performing very strongly. In each of those cases, we feel that each of those games is the best game in the market at what it does, and we've provided it with the best support. Even if there's a creative misfire for whatever reason, and the revenue is weaker for a season or weaker for a year or weaker for seven years, we have the potential to reinvigorate them and bring them back to growth. As you observed, we periodically release new games, some of which may themselves become evergreen in time, which broadens out the portfolio and strengthens the platform. In terms of the model, I would say there's actually a lot to be done, right? I would say sort of in the broad buckets, there is the large language model itself. We want to keep improving the LLM itself, and that actually involves improvement along a number of different dimensions, including making sort of the data higher quality and more comprehensive. That includes making the pre-training more efficient and more effective and improving the pre-training model. That includes improving the post-training and reinforced learning processes in basically extracting the capability of the pre-trained model. That includes improving our infrastructure so that we can actually train more efficiently as well as inference more efficiently, right? When we can inference more efficiently, we can make use of the GPUs better. We can lower the cost of providing the services to our users and customers. When we have an improved LLM, it's actually the foundation for all our AI services. In particular, it would improve our search and productivity-related services. Of course, we also want to improve the multimodal capability of our model so that we can actually provide more customized functions for the users in Yuanbao, right? Within Yuanbao, people are not just using it for search and productivity-related activities. They are using it for all kinds of different multimodal activities. They may want to speak. They may want to turn texts into pictures, turning pictures into text. There are a lot of multimodal conversions within Yuanbao, which we actually need to have very strong capability for. I think the third broad category is actually coding and agents, right? If we can sort of keep improving them, basically, we can provide a much better coding environment for both ourselves as well as our enterprise customers. At the same time, that would enable a better agent and instruction follow capability for our agent. I think that's particularly important for Weixin going forward as we build an agent for Weixin that can be the personalized assistant to the Weixin users in a personalized way. We are actually improving our capability across all these different dimensions. Thank you. We will take the next question from Charlene Liu from HSBC. Thank you, Wendy, and thank you for the opportunity. I wanted to ask about the government's anti-inflation efforts. In fact, these efforts should reduce competition but probably accelerate consolidation of certain sectors. What are your observations so far? Do you expect these changes to impact, or how do you expect these changes to impact your main business lines in the short and long term? Also, separately, we see commercial payment volume growth turn positive in the second quarter. Can we expect that growth to sustain or even accelerate? Thank you so much. On that question, I think your two questions are somewhat related, right? The biggest impact that we have seen is that our commercial payment actually has seen better trends. The better trend is actually driven by the less decrease in the check size. We have always said the commercial payment is a function of the number of transactions times the per-transaction ticket size. The number of transactions have been increasing healthily, but the ticket size has been decreasing. The improvement that we have seen is actually when the ticket size decreased less. I think a part of the driver of that is actually the anti-inflation initiative by the government. Thank you, Charlene. We will take the next question from Liao Yuan from CITIC Securities. Thanks, management, for taking my questions. My question is about your gaming business. We see that FPS has always been Tencent's strength. Recently, we see great success across main titles such as Delta Force, Peacekeeper, and VALORANT. We would like to ask management what you believe are the key factors behind this success. Additionally, looking ahead, we see some upcoming releases of the FPS gaming such as VALORANT mobile games and also some FPS titles, Rainbow Six Siege, and Crossfire: Rainbow. How does management view the differentiation among these titles? Could they compete with each other? Lastly, besides FPS, what other game categories will you invest more in the future? Thank you. Thank you for the questions. Yes, you're right. It is not necessarily intuitive that VALORANT, Delta Force, Peacekeeper Elite would all be thriving at the same time. In fact, Call of Duty Mobile, Crossfire, and Arena Breakout are also doing well despite all of them fitting within the broad tagline of first or third-person shooter games. We believe that the key factor is that this category is the dominant gaming category in the Western world, that it was historically underrepresented in the China market. Now, every year, there's another 10 million students going to college in China, receiving laptops as part of their college materials. Some proportion of them discover that they enjoy playing first-person shooter games. You can see that in the statistics for sales of special keyboard and mice for those games in China that have been surging. In that sense, there's a sort of a structural demographic shift working in favor of these games as technology brings down latency, as we get better at combating cheating, and as the graphics quality of these games improves. In terms of how the games differentiate, in the Western world, Call of Duty, Halo, and Fortnite are all shooter games. In each of them, it's very successful. None of them cannibalize upon each other. That's what we've seen so far and we expect to continue to see in China because there actually is a great deal of differentiation within the sort of supergenre. There's differentiation by mode, obviously, between battle royale versus abstraction shooter versus tactical versus arcade. There's differentiation by character between hero-based games versus class-based games. There's differentiation based on time to eliminate. If you have a fast time-to-eliminate game, then positioning is key. If you have a slow time-to-eliminate game, then gunplay is key. There's differentiation in graphics between realistic versus animated graphics and so forth. We think that this is a very large and rapidly growing genre. It's one where we're the clear market leader with the most experience and the most skills in China. We look forward to bringing Rainbow Six and VALORANT Mobile and other games within the genre to market and complementing the games that are already there, just as VALORANT PC and Delta Force complement Peacekeeper Elite and the rest. In terms of other categories of games, we're investing on a broad basis for games. I would say that historically, we've been somewhat underrepresented in content-centric games. Today, we have Naruto, we have Wuthering Waves, both internal studio games. We also have Nikke. Each of them are one or two in their respective category in China. Wuthering Waves and Nikke are performing very well internationally as well. That's an important growth area that targets a very different user base from the classic user base for the first-person shooter games. I think one not intuitive aspect or another not intuitive aspect of the development of the game industry in China is, with most industries, you start with your highest yielding users, and then over time, you expand the audience into lower revenue per user audience. Actually, the game market in China is not like that. If you look at some of these new cutting-edge tactical FPS games like VALORANT, they actually deliver substantially higher revenue per DAU than our big incumbent games. Similarly, if you look at the big new content games, whether it's Wuthering Waves or Love and Deepspace, they deliver substantially higher, multiple times higher revenue per DAU than the big existing games. As we sort of develop these new emerging audiences, we also have the benefit of higher revenue per time in some of these audiences. Thank you. Thank you. We will take the next question from William Packer from BNP. William, your line is open. Hi, Management. Thanks for taking my questions, and congrats on the spring quarter. At your last earnings update, you shared some expected levels of CapEx spend with chip spending in place for our strategic priority in the context of the AI opportunity. Since May, we've had a huge amount of news flow around chip restrictions. Could you help us think about your chip sourcing options in the context of new rules and the consequent impacts on your CapEx spend and follow-through on group margins? My follow-up is around the impressive quarter of gross margins in the VAS segment following the recent or e pic decisions. Do we think that those changes in out-of-store take rates in your international business are a positive driver for Q2? Is that a source of upside in the future? Any progress you're having with out-of-store partners in China would be interesting too. Thank you. I'll answer the first question. With respect to the acquisition of chips, especially the U.S. chips, the answer is that we don't really have a definite answer on the import situation yet. I think there's a lot of discussion between the two governments, and we're waiting to see what exactly comes out of that. From our own perspective, we do have enough chips for training and continuous upgrade of our existing models. We also have many options for inference chips. We are also executing a lot of software improvement and upgrade in order to drive efficiency gain in inference so that we can actually put more workload on the same number of chips. With respect to our CapEx target, we have not revised our full-year CapEx target yet. When it talks about what's the impact on group margins, I would say the depreciation costs related to AI would definitely continue to go up. At the same time, we also see that we continue to reap the benefits of AI. The issue is that these two may not match each other completely, but I think both of them will be moving in the same general direction. In terms of your second question, Will, the impact of some of the court rulings around app store fees was not really a driver for our VAS gross margin in the second quarter. We have been ramping up the usage of link-out payments in the United States, where the court order took effect relatively sooner. In a number of other jurisdictions, those court orders have only been flowing through in the third quarter, including actually the Australian jurisdiction overnight, I think. We have the accrual accounting for our game revenue and cost of revenue, which means it would take time to flow through the P&L. In China, our Android app store revenue splits have been moving in what we think is a much more rational direction and one that favors either developers and therefore overall usage of the software and the hardware over time. That has been a gentle tailwind for our China business. If you look at the second quarter specifically, the mixed shift from licensed games towards self-developed games, and particularly Delta Force, was a big positive contributor to the VAS gross margin improvement. Thank you. Thank you. We will take the last question from Ellie Jiang from Macquarie. Great. Thank you so much for the opportunity for the question. I have a question on the overall AI strategy. The management has shared a lot of the insights into us kind of exploring into different dimensions of AI integrations. Just in terms of the KPIs we're utilizing to track our AI development's progress from the model layer into the application-agentic AI layer, how do we really tackle the existing challenges, especially on the supply side? I guess that's the first part of the question. As a follow-up to the prior question on the AI investment front, how would we really assess the potential M&A opportunities in the market right now, considering there are actually a surging volume of smaller kind of agentic AI ventures that's been happening? I guess that's the second question. Thank you. In terms of the first question, I would say we do track our AI development progress very closely. I think there are a number of indicators that we use. In tracking the progress, the first one is that we focus on tracking how AI is actually helping our existing businesses, such as ads, games, and fintech. I think that's one area where we see that AI is actually being applied in driving the efficiency gain as well as the growth of these businesses. That's good. Secondly, we focus on tracking the performance and quality of our large language model, Hunyuan. I think there are a lot of metrics that we'd actually have to use in order to track the capability as well as the quality of the model. The third one is we do track how our AI app is actually growing, how many users are using our AI app. That would include users of our Yuanbao, users of our browser, and users of our AI-powered search. Finally, I would say we do track the progress in the design of other AI-related innovative products within our entire ecosystem. That would include, for example, the AI agent for WeChat. That would include agents within our productivity tools. These are the metrics that I think we would use in terms of tracking the progress of our AI development. When you talk about challenges from suppliers, I think I've answered largely the question that we do have enough chips for doing the training and continuous upgrade of our foundation model. At the same time, we are actually using all sorts of different ways to both get inference done using different chips. At the same time, we are also improving our entire infrastructure and software capability in order to squeeze more performance out of the AI chips that we have for inference. Thank you. We are now ending the webinar. Thank you all for joining our results webinar. If you wish to check out our press release and other financial information, please visit the IR section of our company website at www.tencent.com. The replay of this webinar will also be available soon. Thank you and see you next quarter.