Good day, and welcome to the Bilibili third quarter 2023 financial results and business update conference call. Today's conference call is being recorded. At this time, I would like to turn the conference over to Juliet Yang, Executive Director of Investor Relations. Thank you. Please go ahead. Thank you, operator. During this call, we'll discuss business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially from those mentioned in today's news release and in this discussion, due to a number of risks and uncertainties, including those mentioned in our most recent filing with the SEC and Hong Kong Stock Exchange. The non-GAAP financial measures we provide are for comparison purpose only. Definition of these measures and a reconciliation table are available in the news release we issued earlier today. As a reminder, this conference is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on the Bilibili IR website at ir.bilibili.com. Joining us today from Bilibili senior management are Mr. Rui Chen, Chairman of the Board and Chief Executive Officer; Ms. Carly Lee, Vice Chairwoman of the Board and Chief Operating Officer; and Mr. Sam Fan, Chief Financial Officer. I will now turn the call over to Mr. Fan, who will read the prepared remarks on behalf of Mr. Chen. Thank you, Juliet, and thank you, everyone, for participating in our 2023 third quarter conference call to discuss our financial and operating results. I'm pleased to deliver today's opening remarks on behalf of Mr. Chen. The record high community growth we achieved in the third quarter is a testament to the power of our self-driven content ecosystem. It is continuously drawing in more users and keeping them highly engaged. Notably, our DAUs increased by 14% year-over-year, surpassing the 100 million milestone and then landing at 103 million in the third quarter. MAUs also grew to a record high of 341 million, and the DAU to MAU ratio in this quarter improved to 13.2%. Meanwhile, our users' daily time spent also reached a historical high of 100 minutes, with total user time spent increasing by 19% year-over-year. We are encouraged by the strong user growth momentum and the direct correlation with our monetization efforts. Improving margins, narrowing losses, and maintaining growth has been our key objective this year. In the third quarter, we leveraged our expanding traffic more efficiently, integrating commercialization scenarios and products in our content ecosystem to drive quality top-line growth. This is evident in our advertising and VAS business, which grew by 21% and 70% year-over-year, respectively. Furthermore, our gross profit increased by 38% year-over-year, and our gross profit margin rose to 25%, up from 18% in the same period last year, marking the fifth consecutive quarter of gross margin improvement. Our tight expense control measures reduced our total operating expenses by 12%, including a 19% decrease in sales marketing expenses, an 8% decrease in G&A expenses, and a 6% decrease in R&D expenses, all on year-over-year basis. As a result, our adjusted operating loss and adjusted net loss both narrowed by 51% year-over-year in the third quarter. Notably, we achieved an important milestone of generating positive operating cash flow in the third quarter, demonstrating our business operations have entered a positive cycle and marking a step forward in our profitability goals. 2023 has been a year with continued changes across industries and markets. To adapt to the new paradigm, we are increasing our focus on our core business, trimming expenses in areas yielding lower returns. In the fourth quarter, we have further streamlined our organization and expect our total headcount to be around 9,100 by the end of 2023, compared to 11,000 at the end of 2022. Additionally, future project plans will continue to be ROI-focused. With these measures, we will become nimbler as an organization to better align ourselves with the new environment, setting the stage for Bilibili's long-term success. With that overview, let's look at our core pillars of content, community, and commercialization in more detail. Beginning with content and community. The key metrics that represent the quality of our community continue to rise. The number of daily active content creators on our platform increased by 21% in the third quarter, and the monthly new content submissions were 21 million, up 37%, both year-over-year. More content creators and more wider fan base during the third quarter. The number of content creators with over 10,000 followers grew by 36% year-over-year. Total daily video views increased by 26% year-over-year to 4.7 billion, among which, story mode video views grew by 45% year-over-year. As I mentioned, users are spending more time with us than ever before, with user daily time spent reaching an all-time high of 100 minutes. Meanwhile, monthly interactions among our users also increased by 18% year-over-year, reaching 17 billion. By the end of the third quarter, we had 224 million official members who have taken and passed our community exam, a 23% increase year-over-year, and their 12-month retention rate remains strong at around 80%. Our content categories continue to expand, attracting more users and bringing new commercial opportunities for both content creators and the platform. Invariably, our users and content creators enter new life stages and new categories emerge, such as home decoration, relationships, baby maternity, and automotive. For example, new content submissions in home decoration and appearance genre grew by nearly 90% year-over-year in the third quarter. In parallel, content creators in this category and their earnings, as well as advertising revenues generated from the same category, have all meaningfully improved. Meanwhile, we have created more direct monetization opportunities for our content creators. A total of 1.68 million content creators generated income on Bilibili in the third quarter, up 34% from the same period last year. The adaption of video and live commerce has also brought additional channels for more creators to realize their commercial value. The number of content creators who earn money through video and live commerce in the third quarter grew by over 160% year-over-year. Additionally, this summer, our two signature offline events, Bilibili World and Bilibili Macro Link, attracted a gathering of over 200,000 young people in Shanghai to experience our unique community culture. The remarkable attendance underscores Bilibili's influence among the young generation and brought us more brand advertisers with incremental budget allocation. Lastly, I'd like to talk about commercialization. Total revenue for the third quarter was CNY 5.8 billion, flat year-over-year. Advertising revenues and VAS revenues increased by 21% and 17% year-over-year, while offset by 33% year-over-year decrease in game revenues. We are encouraged by the progress in our ads and VAS business, where the revenue growth potential has a direct correlation with D AU growth. Meanwhile, we have taken a closer look at our game business and made certain adjustments to better align ourselves with the new industry landscape. Looking at this in more detail, our growing and engaging community is the foundation of commercialization. As people spend more time and engage in more community activities, they are more willing to pay for Bilibili content and services. Looking at our VAS business. VAS revenue for the period increased by 17% year-over-year to CNY 2.6 billion, mainly led by our live broadcasting business. The ongoing interaction of live broadcasting into our video universe continues to yield results. More content creators are stepping into live broadcasting as hosts, further enriching our live broadcasting offerings and enabling them to earn income. By the end of September, our premium members grew to 21.1 million, with over 80% on annual subscription or auto renewal packages, underscoring the trust and loyalty we have built with our brand. In the third quarter, we launched the highly anticipated self-produced anime, Link Click Season 2: Shiguang Dailiren Di Er Ji, which was well-received by many new and old fans. In September, we announced 68 new Chinese anime titles at our 6th Made by Bilibili Chinese Anime Press Event. Most of these titles will be released in the next few years, ensuring a continuous stream of beloved content of our premium members. Turning to our advertising business. As we further integrate sales conversion tools within our ad products across scenarios, we are now more effectively converting our high-quality traffic into substantial ad revenue growth. In the third quarter, total advertising revenues grew by 21% year-over-year, reaching CNY 1.6 billion, mainly led by performance-based ads, which grew by over 40% year-over-year. Notably, our strong ad revenue growth contributed to meaningful gross profit growth, with higher revenue contribution from our performance-based ads. For the third quarter, our top five ad verticals were games, digital products and home appliance, e-commerce, food and beverage, and automotive. Despite the third quarter traditionally being an off-peak season for e-commerce advertising, our strengthened advertising solutions enabled us to secure a greater share of advertising budgets in this competitive industry. During the Double 11 Shopping Festival in the fourth quarter, we further strengthened our data collaboration with e-commerce platforms and upgrading our video and live commerce and products. The total GMV from our videos and live commerce products increased by over 250% year-over-year for the Double 11 S hopping season. Turning to our game business, total revenues were CNY 992 million, representing an increase of 11% quarter-over-quarter, and a decrease of 33% year-over-year. The reason for the year-over-year decrease was due to a high base from the 2022 summer release of Space Hunter 3, as well as weaker than expected new game performance in the third quarter this year. Our legacy games, Azur Lane and FGO, remained stable during the period. On August 30, 2023, we launched our exclusive licensed ACG title, Pretty Derby. On September 8, 2023, the game was temporarily removed from the App Store for content refinement, and we are working diligently to resume download access as soon as possible. The game industry has changed dramatically in the past two years. At the beginning of the fourth quarter, we closely reviewed our in-house game development projects. We further streamlined our in-house development team and discontinued projects that did not meet our standards. Consolidating these operations will help reduce our future R&D expenses. That said, as a video community for the young generation, we possess natural advantages in the game industry. We aim to further leverage our growing advertising capabilities to strengthen our game distribution power, as well as selectively invest in our in-house development to bring high-quality games to our users and create value for our business partners. In summary, we are dedicated to reach our financial goal of gross profit improvement and loss reduction this year. We have delivered on this goal with a 38% increase in gross profit and a 51% reduction of both adjusted operating loss and adjusted net loss in the third quarter, and we will continue on this path. At the same time, we strongly believe in the power of good content and community. 100 million DAUs is just another beginning for us to build on. We will stay true for our mission and continue to enrich the everyday lives of the young generation in China. This concludes Mr. Chen's remarks. I will now provide a brief overview of our financial results for the third quarter of 2023. As mentioned in Mr. Chen's remarks, our financial profile have significantly improved. We continue to gain operating leverage while building our community and video ecosystem. We have increased our gross profit margin and narrowed our adjusted net loss for five consecutive quarters. Total net revenues for the third quarter were CNY 5.8 billion, on par with the same period last year. Our total net revenues breaking down by revenue stream were approximately 45% VAS, 28% advertising, 17% mobile games, and 10% from our IP derivatives and other business. Our cost of revenues decreased by 8% year-over-year to CNY 4.4 billion, driving our gross profit to CNY 1.5 billion, up 38% year-over-year. Our gross profit margin reached 25%, up from 18% in the same period last year. We expect our gross profit margin to continue to improve in the fourth quarter. Our total operating expenses were down 12% year-over-year to CNY 2.6 billion. In the third quarter, we cut our sales marketing expenses by 19% year-over-year to CNY 992 million, while our DAUs reached a record high. Sales and marketing expenses were 70% of total revenues, compared with 31% in the same period last year. G&A expenses were CNY 499 million, down 8% year-over-year. R&D expenses were CNY 1.1 billion, down 6% year-over-year. As a result, we narrowed our adjusted operating loss and adjusted net loss both by 51% year-over-year in the third quarter. Our adjusted net loss ratio in the third quarter was 15%, improving from 30% for the same period a year ago. Notably, we generated positive operating cash flow in the third quarter, demonstrating our business operation has entered into a positive cycle. As of September 30, 2023, we had cash and cash equivalents, time deposits, and short-term investments of CNY 14.5 billion, or $2.0 billion. In the third quarter, we repurchased an aggregate principal amount of $14.5 million December 2026 notes, with an aggregate cash consideration of $13 million. As of September 30, 2023, the aggregate outstanding principal amount of April 2026 notes, 2027 notes, and the December 2026 notes was $862 million. We believe our cash position is sufficient to cover all of our remaining convertible bonds. Due to lower than expected game revenues, we now expect our 2023 full year revenues to be at the lower end of CNY 22.5 billion-CNY 23.5 billion range. Thank you for your attention. We would now like to open the call to your questions. Operator, please go ahead. We will now begin the question-and-answer session. To ask a question, please press star one one on your telephone and wait for your name to be announced. For the benefit of all participants on today's call, if you wish to ask your questions to management in Chinese, please immediately repeat your questions in English. The company will provide consecutive interpretation for management statements during the Q&A session. Please note that Chinese-English interpretation, English interpretation is for convenience purposes only. In the case of any discrepancy, management statements is in the original language will prevail. Please limit your questions to one at a time. If you wish to have follow-up question, please rejoin the queue. One moment for the first question. Our first question comes from the line of Zhang Xueqing from CICC. Please go ahead. [Foreign language] Good evening, management. Thanks for taking my question, and congrats on the fourth quarter. My question is about user growth. As the DAUs passed the milestone of 100 million for the first time in the third quarter, and the user time spent reached a historical high as well. So what's your views on user growth potential? And recently, media reported that the company has internally proposed a goal of doubling DAU. So can management share the path and the timetable for achieving this goal? Does it require increased expense in user acquisition? Thank you. [Foreign language] I think in the big movement of visualization, it's a very natural process for a good video product to grow bigger and bigger by itself. That's why when we are talking about user growth strategy internally, we've been emphasizing on improving the content quality, improving the user experience, not mainly through the user acquisition. That's why, since starting from second quarter of last year, we have been emphasizing on the ROIs of our user acquisition strategy. As we are spending less in sales and marketing, we are actually growing more and more DAUs. [Foreign language] That is why we have been focusing on improving the operating efficiency, improving our product capability, and pursue, simultaneous commercialization as well as the user growth, virtuous cycle. [Foreign language] In the third quarter, our DAU has surpassed 100 million milestone, and we also reached a record high of MAU numbers. This is a strong evidence that we have succeed, succeeded in our user growth strategy in the past year, and this is just a new beginning for us. 就可能有的那个投资者也会问嘛，就是说在目前这个阶段，B站最应该重视的难道不应该是收入增长吗？为什么我们在内部还会这么重视用户增长？其实原因很简单啊，有两个。第一个呢，就是我认为所有的互联网平台产品，用户量都是一个核心竞争力，因为你有了更多的用户量，你就可以去培育更大的一个作者的群体，然后你也可以有更丰富的一个内容生态。 The reason why we have been focusing on user growth is, I think, for all the internet products, the user base will be one of the key competitive strengths. The larger user base we get, the more content creators, as well as the commercialization will come with it. 然后第二个呢，就是其实作为一个互联网平台产品，商业化的基础也就是用户量。我们可以看到，就是在我们的那个收入里面，很重要的两块，就是广告和直播，它们的增长本质上就是和我们的用户规模同比增长。 For internet product, user base is also the foundation for our commercialization. As you can see from Bilibili's commercialization model, advertising and live broadcasting has its revenue growth has direct correlation with DAU growth. 然后在第三季度，我们的广告业务的同比增长是21%，我们的增值业务的同比增长是17%。然后我们在这块其实已经跑通了一个，就是从用户规模的增长到商业增长的这么一个正循环。而且的话，其实广告的变现效率的增长以及直播的一个增长，它有一部分的收入，它也会变成创作者的变现，然后这样的，创作者他拿到了这个，那个收入之后，他就会有更多的投入，这个也会形成生态的一个正循环。 In the third quarter, our ad revenue and VAS revenue grew by 21% and 17% respectively year-on-year. And as you can see, we have already come to a strategy or form a virtuous cycle between our traffic growth and our revenue growth in advertising and the VAS, specifically live broadcasting. At the same time, the revenue that grew from these two sector has also converted to a certain part of that also converted to our content creators' income and also will generate more content creation on our platform. So from a content ecosystem perspective, it has also been very positive to our overall content ecosystem. 而且我觉得我们现在的用户规模还是有挺大的潜力的，因为我在平时在那个用户当中做调研的时候，我发现很多B站的新用户，他也是被口碑所影响，就是因为我们有比较好的口碑，所以他慕名而来，然后来用B站，然后用了B站之后，他又会把我们推荐给他的朋友。然后我们过去一年虽然用户增长的速度很快，但是我们可以看出我们的UP主群体，包括我们的内容的丰富度，包括我们的社区指标，其实都还是非常的健康和良性的。其实这也说明，就是说我们是有一个非常明显向上的一个势头。 At this point, we still see great growth potential for our user scale. When I do the user research, I discovered that for Bilibili users, there is a great word of mouth effect. People feel good about the product, they will naturally spread the word and introduce new users. And if you look at the past year's data, not only we have achieved very strong user growth, we have also exceeded in many metrics in terms of community growth, video views, and content creators, numbers. That means that we have achieved a virtuous cycle in between the content, user, as well as the community. 我觉得如果我们能够持续地把内容做得更加的繁荣，我们应该是能够去获得更多的用户的。就是我一直认为，绝大多数人都应该成为B站的用户，因为，好的内容跟找到与自己兴趣相关的内容，它本来就是一个非常普世的需求。 I believe as our content ecosystem continues to prosper, Bilibili should be able to attract more and more users, because it's a, we think it's a very natural desire for all human beings to find good content and find friends who share the same interest. 所以在未来，我们会继续以这种，就是把这个产品做好，把内容做好的一种方式，做用户自然增长为主。然后我们在市场投放的过程中，我们也会严格考核ROI，然后确保这个市场投放的这个效率为正。也就是说，我们会在赚钱的情况下达成我们用户增长的这样一个目标。 Going forward, we'll still largely rely on the product improvement, content expansion to drive our user growth. And, pair with ROI-focused sales marketing, and only invest in user acquisition when the ROI makes sense. That means, only to acquire user when we are making money by investing in that user acquisition strategy. That is a mid to long term user growth strategy for us. 对，我记得在去年年底的时候，我也跟大家提过嘛，就是我现在对公司内部讲的就是九个字，增毛利、减亏损、保增长。这三点我们是要同时做的，我们不会说牺牲前两点去做用户增长。 End of last year, I have raised the three key objectives for the company, which is in margin improvement, loss narrowing, and maintain growth. We want to achieve these three target at the same time, not by sacrificing the first two target to achieve the last one. 对，就这么多，谢谢。 That's all. Thank you. Operator, next question, please. One moment for the next question. Next question comes from the line of Fang Wei from Mizuho. Please go ahead. 好，谢谢管理层接受我的提问。那我想问几个小的关于广告的问题，想问一下这个季度里面广告业务，特别是比如效果类的广告，它在三季度里面这个主要的驱动力有哪些？然后我想问一下，双十一期间，你们刚才有讲到GMV的高速增长，那想问一下广告这边表现如何？另外我想问一下，就是我们最近的在视频带货以及直播带货这一块的业务进展如何？那最后想看一下如何看待明年2024年的广告业务的发展。谢谢。So, can management help elaborate on the key drivers for the ad business, especially ERS in the quarter? How's the performance during the Double 11 promotional campaign? In addition, can you update us on your progress on live streaming, e-commerce and short video e-commerce? And lastly, how should we expect the segment growth for 2024? Thanks. 第三季度，B站的整体的广告收入实现了同比增长21%，就是B站整体的收入占比从23%也上升到28%，在整个过程中也带动了B站整体毛利的提升。 In the third quarter, our advertising revenue grew by 21% year-over-year. Ad revenue as percentage of total revenue has grown from 23%, the same period last year, to 28%, in the third quarter this year. Also it has drove the growth margin, growth profit improvement on a complete company level. 相应来说，核心驱动在具体前两个季度也做了比较充分的介绍了，就是其实是纵向的七个行业，垂直的解决方案的深化，以及横向中台能力的提升，还是核心的驱动力。 So we've introduced our key strategy and the driving force of our ad business, in the past two quarter comprehensively, which has been the one horizontal industry solutions as well as the middle platform power improvement. 从 那第二点，从行业上看的话，游戏跟电商行业依旧表现得比较突出。在Q3一般也是电商行业的这个淡季嘛，但是电商广告收入依旧超过了90%的同比增长。除此以外，其实我们也看到了其他行业的一些趋势的变化，包括汽车跟医疗等垂直行业，也环比有了20%以上的增长。这个以后，后续的话，我们也还是会继续深化行业解决方案，能做出更大的这个增速。 So from industry vertical perspective, game and e-commerce has been very strong, despite Q3 being a traditional slow season. Our revenue from e-commerce still grew by 90% year-on-year. Additionally, we have been actively exploring other integrated solutions with other industries. For example, we've seen positive performance from automotive and healthcare industry, which also grew by 20% quarter-over-quarter. Going forward, we will continue to strengthen those industries' performance. 那在平台的技术能力上，其实我们还是挖掘了B站场景流量的商业价值，做了进一步的深化。Q3的话，效果类型的广告同比 增长也超过了40%，而成为了这个阶段广告业务的一些，主要的推动力吧。 We have also improved our ad efficiency on a platform level, unleashing more commercial value across different scenarios. In particular, performance-based ads grew by 40% year-over-year in the third quarter, which has become the main growth driver of our ads business. 今年的双十一的表现依旧还是超预期的，主要还是来自于电商平台广告，收入同比增长超过80%。B站还是会在可及范围之内坚持大开环的策略，持续加深跟各大头部的电商平台的合作，包括数据建设，最近的话，阿里的星火计划，其实我们环比，Q2 618期间有了超过160%的增长。就是合作的品牌也超过了70个。所以B站为商家带来的新客率，我们可以看到，超过了50%，其中母婴品类还是比较突出的。从B站用户到阿里的平台上的新客率更高达89%。 In terms of the Double 11 Shopping Festival performances, we think the overall experience, overall performances has exceeded our expectations. Ad revenue from the main e-commerce platforms grew by over 80% year-over-year. We'll continue to adhering to the open loop strategy and continue to deepen our data collaboration with the top e-commerce platforms. For example, ad revenue generated by the Alibaba Xinghuo Project grew over 160% compare with the June 18 Shopping Festival this year. We've worked with more than 70 brand advertisers to bring new users to those to the advertisers. Over 50% of the traffic converted to Alibaba were new users to those brand owners, and this ratio even reached 89% for baby and maternity vertical. 为什么在这里会提到星火计划呢？因为星火计划的征投以及这个实现，充分证明了B站广告投放的后链路的转化价值。所以除了阿里以外的话，B站也将跟其他平台，包括京东，最近也会上线，金火计划。 The incremental ad budget brought by Alibaba's Xinghuo Project has actually proven the conversion value of Bilibili's performance ads. That's why, in addition to Alibaba's Xinghuo Project, we launched Jinghuo Project, a collaboration program with Jingdong recently. 那在双十一期间，B站的视频跟直播带货的GMV同比也高速增长，超过了250%。B站的消费跟交易的氛围如预期一样，还是越来越浓厚的。在大促的期间，B站的带货视频的数量同比增加了超过230%，带货直播的尝试也同比增加了超过100%。其中B站的UP主Mida直播带货的累计支付金额其实高达16亿元，同比增速也超过了400%。以上这些数据都能看到我们的交易氛围，以及带来广告后续的收入的增速应该能持续比较繁荣。 During the Double 11 Shopping Festival, the GMV generated from our video and live e-commerce increased more than 250% year-over-year, and we have gradually built up our consumption and trading atmosphere within our content community. During the shopping season, the number of video e-commerce related video increased by over 230%, and the number of live e-commerce sessions has also grew by 100%. Bilibili's content creator, Mr. Mideng, his live e-commerce GMV has reached CNY 1.68 billion, which increased by over 400%. From the trading atmosphere as well as the ad revenue growth, we're confident we can continue to build on this momentum and continue to grow our e-commerce-related advertising revenue. 对于今年的最后一个Q跟明年，我们对广告还是充满信心的，就是可能会有进一步的升级。例如在B站社区的内容，其实大家都知 道 是深度能影响用户的消费心智的。我们会坚定不移地做好品牌广告作为基础，UP主的原生广告是我们广告的杠杆，而效果类的广告会让这个收入成为加速器，成为加速器的这个作用。 As for the fourth quarter and to 2024's advertising revenue growth, growth trajectory, we remain, confident. Here are some ways we are hoping to continue to enhance and improve. First of all, is that we all know Bilibili's content can deeply influence users' mindset and the brand perception. We will be very focused and continue to build our brand ad capability. The Sparkle platform will be the lever, and performance-based ad will be our accelerator. 同时也会升级整体的广告模式。 此前几个 Q 我都反复提到，整合营销的方法论是最适合 B 站 的投放效率的。那个优势呢，是在 B 站 同时在多屏多场景可以同时触达用户，从而获得多维的收益。那，2024 年我们将尝试构造客户在 B 站 的内容以及品牌资产，以及在站内建立可度量的长期变现的模式。 Secondly, we will continue to upgrade our advertising model. We've been emphasizing that the integrated marketing solutions will be Bilibili's strong advantage. The reason why is that we can reach user from multiple media and scenario and achieve multiple ad revenue growth. And in 2024, we'll continue to upgrade and help our client, ad clients to build their brand equity within Bilibili content community and help them to build a sustainable and measurable growth model。 第三点的话，我觉得还是在整体，提升效率上。在原来的广告场景，我们会坚持提效的部分，同时也会寻找适配不同投放策略的新场景。 延续今年商业广告融入生态的策略，明年我会进一步的协同自然流量和商业流量，会提升流量的变现效率。 Thirdly, to improve the effectiveness and efficiency of our traditional ad scenarios and find new scenarios that suitable for different advertising strategy. Going forward, we'll continue to find a way to better collaborate between natural traffic and commercial traffic to improve our overall ad efficiency。 第四点是回归客户需求，这是我们深度挖掘了几，四大需求，在客户往后在 B 站 投放的这个场景上应该能获得比较大的收益。第一个是发新品，第二个是怕老去，因为 B 站 还是年轻人聚集最集中的一个视频内容社区。第三点呢，是交易转化。第四点呢，是大节点的营销。就 B 站 将会结合客户 的这四大需求，在 B 站 构建有效的场景。因此的话，无论在今年的 Q4，还是在明年整体的广告收入的持续增长上，我们还是比较有信心的，同时也会进一步扩大整体的广告市场的占有率吧。谢谢。 Lastly, we will pay close attention to the four key needs of our ad customers. Number one, new product launch. Number two, fear of aging. Number three, transaction-based ad needs. Lastly, the seasonal marketing campaigns. We will build on these four key needs and to continue to build a very effective advertising solution. That's why I'm still very confident of our advertising revenue growth in the fourth quarter and a year forward, we aim to continue to expand our marketing market share going forward. Thanks. Operator, next question? One moment for the next questions. Our next questions comes from the line Felix Liu from UBS. Please go ahead. 谢谢管理层接受我的提问。我的问题是关于我们的游戏业务。我们注意到最近，有一些我们的同行也是推出了这个游戏业务，国内游戏环境确实竞争一年比一年激烈。所以首先想看一下我们现在几个自研游戏的这个进展，状况怎么样？我们未来对游戏业务的策略，有何变化和更新？此外，就是我们这个，三季度末上的 Pretty Derby 这款游戏，它目前的这个近况能否和我们，有一些这个更详细的更新。Let me translate myself. So we noticed that my question is on the game business, we noticed the game competitive landscape remain continue to be intense and one of our peer recently exit, exited their game business. So may I get your thought on your own in-house game R&D progress? How you think of the game business from here? And any update on our game Pretty Derby. Thank you. 好，我先说一下关于闪耀优俊少女的这个问题吧。我们非常重视这个游戏，而且我们也非常重视玩家的体验。我们会尽快完成技术优化和少量内容的修正，然后恢复这个游戏的上架。 So firstly, I'll talk about the Pretty Derby. We really value this game; at the same time we value user experience. So that's why we will conduct minor content refinement and technical upgrade as soon as possible and bring the game back to the App Store. 对，我这补充一下呢，就是，其实已经下载了这个游戏的玩家，他们的体验以及反馈都是挺好的。 One thing I want to add is that for user already download the game, their feedback and experience, the feedback has been very positive. 对，我接下来再说一下关于那个就是我们这个自研游戏的问题啊。刚才你也说到，你说现在国内市场的这个游戏市场的竞争很激烈，其实我觉得今年的整个游戏市场的情况，它倒不只是竞争激烈，啊，我觉得，它主要的原因是它，进入到了一个跟过去不一样阶段，因为游戏用户，它新用户的红利已经消退了，它已经进入到了一个，标准的存量竞争的阶段，所以它的一些市场的一些竞争规则发生了变化。 As you mention, there has been a very competitive landscape in the game market this year. I think it's more than that, we think the overall game business or game industry has turned into a new phase, where it's very hard to gain new users, and it has become a more saturated market. 在有新用户红利的时候，其实市场对于新产品是友好的，那个只要你游戏的质量做得好，就能挣钱。而到了存量阶段呢，就是你游戏质量即使做得好，可能也没用，你要么就做到最好，要么呢，就是得做得跟别人很不一样。 In the past year where we still see an incremental growth of gamers in the market, the secret to success is to bring a good quality game. But in the market where is a saturated market, only quality is not enough, unless you have the top of the top game quality and the right timing. 对，我们其实可以看到，因为现在已经到年底了嘛，我们可以看到今年其实绝大多数的新发的游戏的业绩都是不及预期的。其实我们看这些游戏，我们会发现它的质量其实是挺好的，但是呢，它并没有就是做到我刚才所说的两点，要么就是最好，要么就是很不一样，因为它们都是三年前立项的，在它们立项的时候呢，那个时候游戏的市场是有新用户的红利的，然后他们只需要考虑怎么把这个产品做好，而不需要去考虑这个立项的定位。 It's come to an end of this year, we've noticed that we find out that most of the new game launched this year have not meet their original expectation, but the quality of those games has been good. The reason why is that the game was set up three years, probably three years ago, where there was still an incremental gamer growth. Their target is to build a good game, not necessarily have to be the top game or the most unique game. And three years later, the time has changed. 所以就是在今年在用户的角度看来，就是虽然出了很多游戏，但是这些游戏它是有点同质化的，然后它的区别可能就在于我的美术是，80分，然后你的美术是85分，然后他的美术是87分。但是的话，那个他其实陷入到了一个就是某些细节的一些内卷，然后这个并不会让用户觉得我就要去玩这款游戏，因为他手上已经有别的游戏玩了。 From the user perspective, they would notice that for this year, there's a lot of new games, but they all look kind of the same, probably with different artistic designs. And for those game developers, they have turned into a rat race of the minor details. Those rat race wouldn't necessarily means new users and new income and new profit. For users, they don't necessarily have to try out this new game will look the same with others, because they've already have a game they're they've been devoted in. 所以的话，我认为它并不是说游戏市场变小了，或者说是游戏市场那个不活跃了。我们观察到的是那个游戏用户的活跃度仍然非常高，因为那个B站上面其实看游戏视频的用户，我看他们看的时间越来越长，然后那个他们的那个我们游戏视频的DAU是不停地变高的，这个就包括他们对游戏的讨论也非常热烈，他们也很难... 他们也很关注新游戏。所以并不是说用户不想去玩新游戏了，他只是说他没有必要去玩同质化的游戏，因为他现在手上已经在玩这些游戏了，你如果让他接受新的游戏，或者说放弃他手上的游戏，他是需要理由的，这个理由就是这个游戏很不一样，或者说这个游戏让他耳目一新。 So that means not necessarily the game market is shrinking or less active. On the contrary, we still see the gamer has been very active from Bilibili's data perspective, the viewers in our game content verticals, their DAU and their time spend are actually increasing a lot. They also pay close attention to new games, but the new game which can convert real new users needs to be very unique, very different from what the market is already offering. 所以的话就是，其实在新的那个市场环境下，我就觉得游戏它立项的一个那个，那个标准它变化了。那个我其实之前也提过，就是我认为新的游戏，它在新的这个阶段，它得满足三个标准，就是第一是长线运营，然后第二的话就是你至少得是一个垂类的头部，就你要么就是一个所有品类的头部，就是超级头部，要不然是一个垂类的头部。第三个呢，就是那个你得是一个合理的成本，否则因为成本太高了，你也不能挣钱。然后其实过去的那个，相对来说比较跟风式的立项，或者说是通过内卷去跟别人，做出差别，我就卷美术，比你美术卷得更好的，就过去的这个方法它行不通了。 Given said that, we think the time has changed, the standards to invest in new games has changed now. We think there are three key criteria for new game to succeed. One is long term operation, second is to be the top of a niche market or be a super top titles in the market. And lastly is focus on the ROI. And in the past, the copycat type of project setup or the rat race type of R&D investment does not work anymore. 我们今年一直按照这个标准在梳理我们内部的一个资源项目，就是因为外面可能也在传，就是我们那个停掉了一些项目，其实停掉这些项目的原 因就是我刚才所说的这些原因，就是我们砍掉了一些我们过去立项的时候，就是不满足我刚才所说的标准的这些项目。然后那个之所以要调整，是因为如果我不调整的话，它到了上线的时候，它也不能符合现在的市场的要求，它也不能挣钱。所以与其这样的话，那我还不如及时地去做调整。 That's exactly the why I we have been reviewing and adjusting our in-house development projects, because some of the projects were established based on the old standards and based on the new market and new standards, those project is very likely to be loss-making when the game came online. That's why we are doing those adjustment and streamline our projects. 然后经过今年的调整吧，我们其实在内部仍然那个就是保留了一些我们判断在未来的市场有竞争力的项目，然后我们会把我们的资源集中在这些项目上。 After this adjustment of our in-house development game, we still kept few titles that we think will remain competitive in the current market. We will be very paying close attention to the money invested in and focus our limited resource on the very selective titles who can meet those new standards. 我觉得这是一个正确的一个做法吧，而且那个我认为它并不是只有B站才在做这事儿，我认为整个行业其实都在做这一件事情。我其实觉得，现在这个情况对于游戏行业来说，它未必是个坏事儿，因为它标志着游戏行业在回归它的本质，那就是它得是一个比较创新的一个行业，它得是一个就是真正地体现出团队创意和竞争力的一个行业。 We think, the thing that we're doing with our project adjustment, is correct. This movement is not only being done by Bilibili, and it's actually across the industry, and it's not necessarily a bad thing. Yeah, we have returned to the fundamental of game developing, which for this industry, the key competitiveness is innovation, and who can really succeed in this industry is the one with the most brilliant idea, or the one with the most innovative game making can prevail and succeed. 最后我想说的话，就是其实大量的年轻活跃的玩家，他是每天都活跃在B站上的。... B站，它仍然是中国年轻人聚集度最高，而且游戏内容丰富度最高的视频平台。所以的话，就是我一直认为B站在游戏这个赛道上，它是有着天然的优势的，我们的团队其实也有着天然的敏感度，我觉得我们要做的是把这个优势转化为现实。 Lastly, I want to emphasize that on Bilibili platform, there are a large amount of young users, young gamers have been very, very active on our platform. Bilibili is still the most popular game video content platform in China, with a very high concentration of young generations. Also for our team, game development team, they also have the sense and understanding of Chinese gamers. What we need to do is realize those advantages and translate that into game development. Thank you. Operator, next question, please. Certainly. One moment for the next question. Next question comes from the line of Zhang Lei from Bank of America. Please go ahead. Hi, 管理层，晚上好，谢谢接受我的提问。我的问题主要是关于财务方面的，看到我们最近几个季度，毛利率的趋势还挺不错的，可以帮我们展望一下就是 Q4 的，毛利率的情况，还有我们今年的这个全年减亏的目标有没有变化？然后就是公司之前有提到过 2024 年盈亏平衡的这个目标是否可以继续实现，还有可以分享一下，实现的路径。谢谢。我自己翻译一下。Thanks management for taking my question, and question is mainly regarding margin. So you notice that we have a pretty distinct improvement in gross margin. And can you give us some outlook for Q4? And how do you look at your full year loss control target you made previously? And any change to our break-even target by 2024? Thank you. Okay. This is Sam. I will take this question. In Q3, our gross profit grew by 38% year-over-year, and our GPM improved five consecutive quarter to 25%. We expect our gross profit margin can continue to improve sequentially in Q4 as there is more revenue contribution from ad revenue. At the same time, we narrowed our non-GAAP operating loss by 51% in Q3, and then we expect we can narrow our non-GAAP operating loss even more in Q4 compared with Q3. That will help us to achieve our initial financial target, that to reduce our non-GAAP operating loss by CNY 3 billion in 2023. So we still keep our initial financial goal unchanged. Notably, our operating cash flow has turned positive in Q3, and indicating the business operation had entered into a positive cycle. We expect we can continue to generate positive operating cash flow in Q4. Looking to 2024, we will continue our path of growth, profit improvement and loss narrowing. On one hand, we have confidence in the growth of our high margin business, like ad revenue, which will continue to contribute the gross profit, gross profit growth, and that will be the main driver to narrow the loss. On the other hand, with some recent structured adjustments, we expect operating expenses, including R&D expenses, to further decline in 2024. Together, I think we will continue work toward the goal of even. Thank you. Yeah. Thank you, Sam and management. Thank you for the questions. That concludes the question- and answer- session. Thank you once again for joining Bilibili's third quarter 2023 financial results and business update conference call today. If you have any further questions, please contact Juliet Yang, Bilibili's Executive IR Director, or Piacente Financial Communications. Contact information for IR in both China and the U.S. can be found on today's press release. Thank you and have a great day!