Good morning. Thank you for joining us for NetDragon Websoft Holdings Limited today for our 2024 interim results presentation. We also live-streamed it on Roadshow China, Futu, and Tiger platform. Presentation PowerPoint is currently available under the Webcast, News, and Event tag on NetDragon's IR website. If investors on webcast wish to raise questions, please feel free to enter your questions in the text box. Management will answer your questions during the Q&A section. [Foreign language] Good morning. Thank you for joining us for a NetDragon Websoft Holdings Limited today for our 2024 interim results presentation. [Foreign language] First, please allow me to introduce the management who are joining us today. [Foreign language] Dr. Simon Leung, Group Vice Chairman and Executive Director. Hello, everyone. [Foreign language] Group Vice Chairman and Executive Director. Mr. Ben Yam, Group CFO. [Foreign language] Mr. Lin Chen, Group Senior Vice President. [Foreign language]. Now, please allow me to pass the time to Dr. Simon Leung. [Foreign language] Okay. Thank you. Let me see. Not very tall. Good morning! No, no, no, that's not what I was expecting. So we have to get you working on a Friday, I guess, you know. But anyway, it's good to be here. It's actually... I'm gonna take you through some so-called highlights. It's gonna... Well, it's an eventful year for us. It's actually some challenges, some headwinds, but nonetheless, there's a lot of opportunity ahead of us. So, from a company standpoint, from a management standpoint, and for the board, we as optimistic and enthusiastic as before. But that said, we need to hunker down and work on some of the issues. So I'm gonna go through that, some of that today. Now, before I do that, I need to remind everybody, it's like, the education company, Mynd.ai, is a separately listed company on the New York Stock Exchange under a very different governance. Even though we own a big chunk of the company, we have a separate board running it. It's listed on the U.S. It's actually under the governance of the New York Stock Exchange rules. So I can only talk about it in kinda directional with directional comments. I cannot go into the details because I'm the non-executive chairman of the company. In anticipation of that, actually, we're gonna arrange a separate capital day for everybody to call in and ask the management team very specific questions about what are the challenges, what are the opportunities going forward. Okay, with that, you, some of you or most of you are very familiar with the, with the agenda, so I'm not gonna say anything. So just hit some of the highlights, I'm not gonna go into detail. For gaming, the good news is actually we're growing. Actually, we have some short-term challenges, which Lin Chen will talk about. We have a lot of them addressed already. Some of them, like, forex, like exchange issue, is something that we cannot do. And then don't forget, the worldwide economy is actually under some interesting, I would say, transformation, from that standpoint. But I guess the good news is actually there's a, you know, this new game called Wukong that came out that's kinda like a shot in the arm, not only for China, but also for around the world. I happen to be on a board of directors of a Swedish gaming company, so a lot of people are talking about it. They're very enthusiastic about the gaming business going forward. Okay. On the Mynd side, actually, like I said before, we're seeing some headwinds. For example, like inflation is actually hitting the U.S. As you may or may not know, U.S. is our largest market in education, so we're dealing with that. So, and Europe is actually, we are also seeing economic downturn. I mean, you've been reading the news with the war in Ukraine and with Russia and all that stuff. But the good news is, actually, we are growing in places like Germany. So, that's... I can delve a little bit more into the detail later on. The other good news is actually, we're working on improving a lot of our metrics. For example, like, you know, our cost, our margin, everything. Ben's gonna highlight it at a very high level. Again, the upcoming Capital Days for Mynd.ai, we will go into more, much more detail. Last but not least, for education. I think with the advent of AI, with challenges, you know, with inflation and everything, and schools around the world or school districts around the world are looking for opportunities to, number one, to enhance the productivity of the teachers and, you know, maybe also for the students, so that allow us to create services that we can help them out. So, SaaS is actually, is gonna be a term that you're gonna be hearing a lot going forward. It's actually, we also coined a term called CaaS, which is actually Classroom as a Service, because it's of what we have. I can assure you, we have a lot of activities going on to address that issue, but unfortunately, a lot of them are work in progress. I cannot disclose a lot of the activities that we are doing. We're very confident about moving from a pure hardware play into really a hardware and a services play. Our biggest asset in education with Mynd.ai is our 1.5 million classrooms around the world, and we keep adding to it every year. So, with that, I'm gonna tee it up. I think Ben's gonna spend a couple of minutes to go through the financials, and then followed by Lin Chen. I will come back and talk a little bit more about Mynd.ai, and then we'll give you a view of what we think in the next, well, actually, is not, not six months, even though this is interim, for the next few months, and then how does it lead up to 2025? We open up for Q&A. Okay? Thank you. Thank you, Simon. Good morning. All right, so I'm gonna go through a couple of slides of financials, and as Simon mentioned, you know, the first half is, you know, full of challenges and also opportunities, and specifically, I think we're seeing some challenges on the top line on the revenue side, but I think we've been doing a lot to manage sort of the bottom line, so I think we've done a lot in terms of, you know, cost savings and also investment income, which really mitigate a lot of the decrease in revenue. So if I look at this overall P&L here, we're seeing stable, you know, game and application services revenue, while, you know, Mynd.ai also, you know, experience a decrease in revenue. And I'm gonna go into that, you know, in the next slide, with a little bit more details. But the good news, the positive news, is that we're seeing a increase in the gross margin percentage from 62% to 66.6%. So we're seeing an increase in gross profit margin. And also on the overhead side, we're implementing a lot of the cost savings measures, a lot of measures to improve our operational efficiencies. As you can see, for selling and marketing expenses, we're seeing a 20% decrease year over year in sales and marketing as we really try to optimize, you know, our sales force and also trying to use our resources more efficiently. If you look at admin expenses, it decreased a little bit, sort of a smaller number, 3.3%. If you exclude sort of the Singapore, you know, learning center operation that we acquired last year, that reduction in admin expense is actually about 11% year over year. By the way, the Singapore operation is a positive EBITDA business, so just to put that on record. And then in terms of R&D, you know, we're obviously, we're continuing to invest in R&D because, you know, we have to, you know, continue to put resources to develop, you know, new offerings in terms of gaming and also in education. On the bottom line, as I mentioned, you know, we, you know, driven by, you know, sort of, you know, cost efficiencies and also, partially by investment income, we're actually seeing a positive, a growth in EBITDA by 12.9%. And, and also non-GAAP EBITDA as well. It's actually a larger, 33%, increase in EBITDA, and, as well as profit, profit before taxation, also a 21% increase in profit before taxation. If you look at sort of the net profit attributable to owners of the company, that's the Bloomberg number, right? It's a decrease of 20% to CNY 400 million. I want to point out that. I don't know if you guys can see this. There's actually a one-time deferred tax provision of roughly about $40 million, which we have to record in the first half. What that is is really a provision on the deferred tax asset that we have to record on the books of Mynd.ai. The reason for recording that is because, you know, it's according to accounting principles, you have to record it, just in case, you know, Mynd.ai does not have enough income to sort of, you know, offset, you know, the tax loss carryforward. Because that's what that is. That's tax loss carryforward. That actually can be carried forward for seven years. So unless we can be profitable, you know, in the next, you know, four to seven years, otherwise, you know, we actually can reverse that, that provision in sort of in the future years. So I think that's really a one-time, non-cash, non-operating item that you guys should take note of that. And if you exclude that item, our net profit actually increased by 24%. Actually, if I kind of look forward a little bit, right? So if I look forward at sort of the net profit figure for the full year, I think, you know, what we're looking at is actually a number that's actually very much in line with, you know, many of the sell side estimates and also, you know, the Bloomberg consensus. I hope you guys can kind of take note of that, that we're confident of the full year, sort of the bottom line performance. Then, on the balance sheet, I guess, you know, I'll just, you know, highlight the cash balance. We want to include liquid investments, sort of, you know, cash and liquid investments as a more proper metric, because we do invest in sort of, you know, very liquid investments. We invested in some Ethereum, as some of you guys would know, and we're actually sitting on a pretty profitable position right now on that. If you look at our cash and liquid investments balance, as of the end of the first half, it's actually increased by 11% compared to the end of last year. Okay, this is the segmental financial highlights. First of all, the top line, you know, going through the gaming and application service segment first. So if you look at the gaming, it's a stable performance, a little bit slight, you know, 0.8% negative growth. And I would attribute that to a couple of reasons. One is, and this is something that Lin Chen is gonna highlight, we had a little bit of a short-term issues, you know, on the overseas gaming side, and that led to sort of a material, you know, decrease in our overseas gaming. The second thing is that, you know, it's, I think, you know, the overall gaming spending, I think if you look at the industry gaming spending, looking at the research report, like the Gamma Data report first half is roughly about 2% growth for the entire gaming industry, domestic, right? If you, and if you sort of, take out the mini-games, right, it's actually a reduction of 2.8%, right? So I think it's a very stable performance for us, you know, in line with the market. We did not launch any new games in the first half, right? So that's also part of what we have to consider. And, and yeah, I'll let Lin Chen go more into that. Then, the gross margin, you know, decreased a little bit. I think that's mainly sort of a mixed issue, right? Because gaming, it's a slightly lower percentage of the whole, you know, segment revenue. So that led to a little bit of a lower gross margin. But if you look at the gaming gross margin per se, then it's actually pretty stable. Then, yeah, on the SG&A side, I think it's pretty much in sync with what I just sort of highlighted in the last slide. You know, we decreased our sales and marketing. We decreased our admin expense. A lot of that is driven by sort of cost efficiencies, right? Cost rationalization. What we did in the first half is actually, we, you know, did a headcount review, and we actually rationalized some of the headcounts, and in the meantime, also upscale, you know, our resources and our people, right? And then, on the Mynd.ai side... Sorry, just, yeah, on the Mynd.ai side, I think, yeah, so we're seeing a 23.5% decrease, you know, in our revenue. And I think, there are a couple of factors, right? So first is, you know, we're still seeing a lot of normalization of sort of the demand of the hardware sector, because of, you know, after the, after the, the sort of the, the very large COVID funding that we saw, in the past. And I think that's, that's one factor. And the other factor is really sort of, you know, inflation, sort of also playing a role, in that, as well, because inflation really affected, you know, teacher salaries, affected, some of the recurring overhead of the schools, and that sort of squeezed the budget a little bit, you know, for some of our customers, and that affected our hardware revenue. But I think the good news is that, you know, we're honestly, you know, we're not really focused on, you know, sort of hardware, right? I mean, yes, we are focused on hardware because that's our bread and butter from a revenue standpoint, but we're more really going, moving into sort of the software and service-based model, right? So that's what Simon mentioned. This is something that we're really gonna dive into that, you know, when we, when Mynd.ai has its own capital markets day. And then for gross margins, it will be increased by 4.3 percentage points. And I think that's, again, you know, cost savings, efficiencies. You know, we experienced decrease in the components cost, right? A lot of work on that. And also we, we had decrease in the freight cost. We also moved, part of our contract manufacturing, into Mexico, right? To reduce sort of, yeah, the tariffs and, and some of the savings. And, and also we, we reduced our warranty, you know, expense as well. That's also part of the cost of goods sold. So, because our failure rate actually is lower, so, which is good, right? So that's why, you know, we saw an increase in the gross margin percentage. And then on the SG&A side, you know, sales and marketing decreased by 26%, you know, as we optimize our sales team while we continue to deepen the reach of our customer base, right? So we're not reducing our sales force, you know, to get a lower revenue. We're really rationalizing our sales force to get better revenue in the future. And therefore, the admin expense, you'll notice that it's a 37.9% increase, which sounds a lot, right? But again, remember, we acquired the Singapore Learning Center business last year, and that business actually contributed a lot of sort of admin expense, right? It's a positive EBITDA business, but it contributed a lot of admin expense. So if you look at that line item individually, you're seeing a very large increase. If you exclude that Singapore operation item, sort of the Singapore entity, the admin expense only increased by 11%. So hopefully that sort of give you guys a clear picture of the segmental financials. And that's it for my part. I pass the stage to Lin Chen. [Foreign language] Ah, thank you, ah, Lin Chen. OK, what I'm gonna do is actually go through Mynd.ai very quickly at high level. I think I'm not gonna go into detail because it's actually been talked quite a bit about some of the numbers, but directionally, I'll tell you where we're going. So, I mean, we have some challenges in terms of the revenue, but the good news is actually a lot of metrics is actually up. I've another slide on it. So what we're doing is actually we are optimizing everything and also be prepared for the future. So it's actually, this is actually our advantage. I said the-- but the biggest one is still our 1.5 million classrooms around the world. We're adding it, adding to it, not as the same pace, but I think one thing I'd like to mention very quickly is actually we have a new product coming out towards the end of the year. I can't go into detail, but that's actually very, very exciting and actually very suited for where we are today and also go into the future in terms of services, in terms of embracing AI. So again, I mean, some of the metrics. Gross margin up is actually we are managing the sales and marketing expenses and EBITDA and all the good stuff. So but it's just like a life in a, in a company. We need to manage this, whether we are growing or we're facing headwinds. So just kind to sum it up is actually we... I mean, we do have some challenges, some headwinds, but we are continuing. We believe this is actually tremendous market for us going forward. The fact that we have AI coming in with services, people start to embrace, and that will only-- that will take us also outside the classroom and possibly into people's home for learning. So, to sum it up, is, I think, it much better for us to have the management team of Mynd.ai to talk to all of you. So we decided to do a Capital Days for Mynd.ai later on in the year, so I'm sure you'll be hearing about it, so. Okay, very quickly on the outlook, actually, Lin Chen talked about the gaming already. So we are excited because it's actually, I think, I mean, unfortunately, it's not our game, Wukong, but actually, that give you a view of where the market is going. I think one of the things we talk about, and we've been doing it for a long time, and we did not highlight it well enough on gaming, is actually Global South, in which actually, Middle East is actually part of it. So the fact that we've been in Middle East for a while, and if you look at a lot of the activities, especially in Saudi Arabia, that's going to be that whole area is going to be an opportunity for us. Now, not only for gaming, but also over to education. We're doing a lot of work. A couple kind of comments on how we are addressing going forward in the education market. So we're doing it the same way, which is actually organically we grow. Organically means we're going to create our own product and do that. We're going to also do it inorganically, which is actually we'll find some other way, whether we partner or we maybe do some acquisitions. So that's the direction, that's the strategy. So it's not, I'm not saying we will do some tomorrow, so but that's what we're going to be doing. So with that, just kind of finish for the year. We're cautiously optimistic about both businesses, but we have to be cautious and recognize there is some economic kind of challenges for the U.S. and also for Europe and also certainly for this part of the world, so we are very cautious about how we approach the market to make sure we do all the right thing for the business, both in the short term and also in the long term. With that, so why don't we open it up, so what do we do? Oh, okay. Thank you, Dr. Liang and management. Now it's time for our Q&A section. If you have questions, please raise your hands and our colleagues will pass the microphone to you. Before your questions, please also tell us your name and the firm you're representing. For investors on webcast, we, if you wish to raise question, please feel free to enter your question in the text box and we will read it out for you. [Foreign language] Let's welcome our first question on the floor. [Foreign language] [Foreign language] We would like to welcome our next question. 好，谢谢管理层。我是国元国际的王逸达，然后我想问一个财务方面的问题。我们看到，咱们这边现金增加了不少，但是呢，同时这个贷款也是增加了，并且最近这个应该有十几亿了。这一块是一个什么情况呢？就是它是一个什么样的作用，以及未来，会有一个什么样的规划？谢谢。 [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] Thanks for the presentation today, regarding the games business segment, please elaborate how does NetDragon balance the need to attract and retain best employees, such as developers and testers etc, ensure timely and consistent quality of game and upgrades.For example, meeting KPI, yet also keeping the salary competitive and not overpaying for talent. Thank you! That's a loaded question. How much time do we have? Like, I mean, it's actually. I think we need to spend the rest of the day to tackle it. To me [Foreign language] [Foreign language] [Foreign language] OK。 [Foreign language] Yeah, [Foreign language] So let me do this, so I'm gonna kind of talk about it in general, like I said, I have to apologize to the gentleman who asked the question. So exactly, I think what we do is actually we summarize what our Lin Chen has said, and then we will send it to him. But in general, exactly, it's kind of like a dynamic process. We don't have a one set of rules addressing everything. So what he's saying is actually we're going to be looking for different people for different parts of our businesses. We want people to be, you know, creative, which is a core group, but we also need a lot of foot soldiers to help us to kind of implement what we want to do. I think the salary part is actually quite simple. We need to be market competitive, right? So exactly, you know, we're going to have a mix of people in terms of skill set and also like, I mean, we want to give them meaningful job so they can be satisfied with what they're doing. So I want to bring AI back in here. I think that's part of the whole strategy. With AI, we can kind of have AI doing a lot of the less interesting job or repetitive job of everybody, and allow people to focus on being more creative, being more entrepreneurial. So it's actually that's kind of the overall direction. Again, not just for gaming, but also for our other businesses, too. [Foreign language] This concludes the presentations today. We wish you have a very good day today. Thank you very much. [Foreign language] [Foreign language] [Foreign language]