Ladies and gentlemen, thank you for standing by, and good evening. Thank you for joining Sohu's Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in the listen only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host for today's conference call, H uang Pu, Investor Relations Director of Sohu. Please go ahead. Thanks, operator. Thank you for joining us today to discuss Sohu's fourth quarter 2020 results. On the call are Chairman and Chief Executive Officer, Dr. Charles Zhang, Chief Financial Officer Joanna, and Vice President of Finance, James Deng. Also with us today are Changyou, CEO Dewen Chen, and CFO Yaobin Wang. Before management begins their prepared remarks, I would like to remind you of the company's safe harbor statement in connection with today's conference call. Except for the historical information contained herein, the matters discussed on this conference call may contain forward-looking statements. These statements are based on current plans, estimates, and projections, therefore you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. For more information about the potential risks and uncertainties, please refer to the company's filings with the Securities and Exchange Commission, including the most recent annual reports on the Form 20-F. Please also be reminded that Sohu's results of operations have been excluded from our results from continuing operations. Retrospective adjustments to the historical statements have been made in order to provide a consistent basis of comparison. Unless indicated otherwise, the results that we talk about are related to continuing operations only. With that, I will now turn the call over to Dr. Charles Zhang. Charles, please proceed. Thanks, Huang Pu, and thank you to everyone for joining our call. For the fourth quarter of 2020 and for the whole year of 2020, we faced significant challenges with the outbreak of the COVID-19 pandemic and the uncertain macroeconomic environment. However, with our continuing efforts to innovate products and technology, improve monetization efficiency, and strictly control our budgets, we're able to return to profitability as we recorded net income of $53 million this quarter, which greatly exceeded our previous guidance. For the whole year of 2020, excluding an additional accrual of withholding income tax made by Changyou in the second quarter, we also achieved a profit of $51 million. For Sohu Media Portal and the video, we continue to focus on generating and distributing real-time and reliable news and premium content, and strengthened our competitiveness and credibility as a mainstream media platform. We consistently upgraded our live broadcasting technology integrated into the Sohu product matrix and applied widely to various content marketing events, which further enhanced the overall value of the Sohu Media Portal and Sohu Video. Benefiting from our continuous efforts, our brand advertising revenues reached the high end of our previous guidance for Q4. For Changyou, thanks to the solid performance of some special servers for TLBB PC that were launched during the quarter. The online games business performed well, as revenue exceeded the high end of our guidance by a lot, I assume. Let me look at the financial numbers. For the fourth quarter of 2020, total revenues, $253 million, up 34% year-over-year, and 60% quarter-over-quarter. Brand advertising revenues, $42 million, flat year-over-year and up 2% quarter-over-quarter. Online game revenues, $196 million, up 49% year-over-year, and then 94% quarter-over-quarter. GAAP net income from continuing operations attributable to Sohu.com Limited was $47 million, compared with a net loss of $29 million in the fourth quarter of 2019, and a net loss of $15 million in the third quarter of 2020. Non-GAAP net income from continuing operations attributable to Sohu.com Limited was $53 million for Q4, compared with a net loss of $6 million in the fourth quarter of 2019, and a net loss of $7 million in the third quarter of 2020. For the whole year of 2020, total revenues, $750 million, up 11% compared with 2019. Brand advertising revenue, $147 million, down 16% compared with 2019. Online game revenues, $537 million, up 22% compared with 2019. Excluding the impact of additional accrual of withholding income tax recognized by Changyou in the second quarter of 2020, GAAP net income attributable to Sohu.com Limited was $33 million, compared with a net loss of $157 million in 2019. Excluding the impact of the additional [accrual] of the withholding income tax I've mentioned, non-GAAP net income from continuing operations attributable to Sohu.com Limited was $51 million for 2020, compared with the net loss of $128 million in 2019. Let me go through some of our key businesses. First, Media Portal and Sohu Video. For Sohu Media Portal, in the face of the COVID-19 pandemic and the challenging macroeconomic environment, we continue to innovate our products, upgrade our technology, and keep refining our content distribution features by stimulating content generation and user generation, and user interaction. We were able to further enhance our credibility by reflecting the attitude and the core values of Sohu. For Sohu Video, in 2020, we continued to execute our Twin engine strategy. For long-format content, we successfully rolled out new original idol romance content, "Well-Intended Love, episode 2, and My Dear Lady" were both well-received by audiences. Thanks to the high-quality content and the better operating efficiency, our subscription revenue increased significantly during 2020. Despite delays in shooting new dramas as a result of the outbreak of COVID-19, we currently have several original dramas in our pipeline that will be steadily rolled out in 2021. Most of them were filmed in the later part of 2020. For short-form content, the other part of our Twin engine strategy, we accelerated the deployment of value live broadcasting in various areas, such as medical health. We're glad to see the live streaming technology advancement that we have achieved. We deeply integrated our unique live broadcasting technology, such as multi-person microphone relay feature, with our products on the Sohu platform and widely expanded the live broadcasting landscape. We proactively applied this advanced technology across various creative activities, including large content marketing events, value live broadcastings, and live e-commerce, enabling users to interact with each other in real time, whenever they are. During this past quarter, with this live broadcasting technology, we successfully hosted high-end interview, like Boss One Plus One, and also the e-commerce best selections by celebrities, and several traditional flagship events, such as the Sohu Fashion Awards and the Sohu Finance Annual Conference. These events not only attracted a lot of attention in real time in terms of content, but also we were able to build even more attraction upwards and also attract advertisers. These events greatly reinforce our brand influence and help to effectively secure high budgets from advertisers. Next, let me turn to Changyou. For the fourth quarter of 2020, we launched some special servers for TLBB PC that used a memorable early version of the game for content. We're calling this TLBB Vintage. Thanks to its exceptional performance, online game revenue exceeded the high end of our guidance. For PC games, TLBB Vintage helped us to draw back many players that we lost over the years, who loved and feel nostalgic for their experience from years ago. We were able to build up a lot of excitement around the launch, the efforts helped to significantly boost in-game spending. Meanwhile, Changyou also upgraded regular TLBB PC by introducing, for the first time, a capital city map in which players from all servers can interact freely, and redesigning the cross-server clan war system. For mobile games, Changyou launched a new expansion pack for Legacy TLBB Mobile that featured the addition of a new clan and other creative cultural content. All of which helped keep player engagement stable. Next quarter, Changyou will further optimize TLBB Vintage based on user feedback, and then will also unveil a variety of holiday events as well as promotions for the regular TLBB PC and Legacy TLBB Mobile. Currently, several key games are being developed, and we look forward to introducing them to players soon. Looking ahead, Changyou will firmly execute its core strategy of top games. Changyou's strategic focus will continue to be MMORPG mobile games. We're also developing and looking to roll out games across various genres. Let me turn to CFO Joanna, who will walk you through financial results in detail. Joanna Lu? Thank you, Charles. All of the numbers that I will mention are all on a non-GAAP basis. For Sohu Media Portal, quarterly revenue for $24 million, up 7% year-over-year, and down 1% quarter-over-quarter. The quarterly operating loss was $28 million. Compared with an operating loss of $25 million in the same quarter last year. For full year 2020, Sohu Media Portal revenues were $86 million, down 9% compared with 2019. For full year, net loss was $92 million, compared with an operating loss of $130 million in 2019. For Sohu Video, quarterly revenues were $23 million, up 6% year-over-year, and 1% quarter-over-quarter. The quarterly operating loss was $11 million, compared with an operating loss of $18 million in the same quarter last year. For full year 2020, Sohu Video revenues were $91 million, flat with 2019. Full year net loss was $43 million, compared with an operating loss of $94 million in 2019. For Changyou, portal revenues, including 17173, $199 million, up 47% year-over-year and 91% quarter-over-quarter. Changyou posted an operating profit of $112 million, compared with $50 million in the same quarter last year. For full year 2020, total revenues, $548 million, up 20% compared with 2019. Changyou posted an operating profit of $238 million, compared with an operating profit of $169 million in 2019. For the first quarter of 2021, we expect brand advertising revenues to be between $27 million and $32 million. Online game revenues to be between $137 million and $147 million. Non-GAAP net income from continuing operations attributable to Sohu.com Limited to be between $5 million and $15 million. GAAP net income from continuing operations attributable to Sohu.com Limited to be between $1 million and $11 million. This forecast reflects Sohu's management's current and preliminary view, which is subject to substantial uncertainty, particularly in view of the potential ongoing impact of the COVID-19 pandemic. Lastly, please be reminded that in the Q&A session, we won't take questions regarding any Sohu business updates or the agreements with Tencent for Sohu's privatization. This concludes our prepared remarks. Operator, we would now like to open the call to questions. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. To ask questions on the phone, you may press star one and wait for your name to be announced. To cancel your request, you can also press the pound or hash key. Once again, to ask question, please press star one. There'll be a short silence while questions are being collected. Thank you for your patience. Our first question comes from the line of Eddie Leung from BofA Merrill Lynch. Please go ahead. Okay. Good evening, guys. Thank you for taking my question, and I hope all is well with everyone of you. I'm just curious on your outlook for first quarter 2021. Number one, it seems to be a pretty big range, especially on the advertising side. Number two, when we look at the year-over-year growth, on the advertising side, brand advertising, could you talk a little bit about how much is more from a industry rebound, industry recovery, and how much is, broadly speaking, coming from the efforts you have done in the past year? For example, having more rich media, including live streaming in your portal, as well as the offline events you held for your marketers. These are my two questions. Thank you. Okay. Hi, Eddie. This is Charles. Yeah. Actually, several elements are all contributed to the outlook of the first quarter 2021. First of all, a year ago, we have pandemic outbreak, right? This year, the effect is less. This year, both the first quarter are the slow quarter because of the Chinese New Year. This 2021 Chinese New Year is actually a little later than 2020, right? These are the negative impact. Well, the less effect of the pandemic is a positive contribution, and the Chinese New Year. There is definitely the continuation of our efforts with the live broadcasting technology and its application to our various marketing events, to create both content and also advertising opportunities for our advertisers to be more interested or excited about the creative events that we are creating. This month, we are also having this goodies selection, e-commerce event, and also around the Chinese New Year, we have these live broadcasting programs featuring various programs, various people, and celebrities. These are all contributing. A number of factors contributed to the outlook of advertising. I don't know whether Charles and Joanna can talk about the big range of the advertising outlook. The reason I ask this question is that I know that most of your advertisers are quality big brands, so I think typically, they would have a marketing plan, some type of budgeting, right? Usually the flexibility should be pretty good, unlike pure performance-based advertising, right? It seems like this year, especially this quarter, we are looking at a pretty big range in terms of the outlook, 5%-25% year-on-year, right? I wonder why this is a bit larger than usual. Yeah. Just because we have brand advertising with most of those top advertisers, it's like big items, right? If you have a small number of advertisers with instead of 10,000 or 5,000 advertisers, we have a few hundred, I mean, 100 or dozens. A big one, each one spending a large number. Any change of one advertiser may drive the whole revenue up and down. Also, the first quarter is a slow season with the Chinese New Year, and decisions made can be changed or something. Oh, thank you. Thank you very much. Thank you. Thank you for the questions. Once again, ladies and gentlemen, to ask a question, you can press star one and for your name to be announced. The next question comes from the line of Alicia Yap of Citigroup. Please go ahead. Hi. Good evening, Charles and management. Thanks for taking my questions. I have two questions. First of all, on online games, I wanted to understand the outperformance for these PC TLBB. This was due to [product] release for this special server. I wonder if this strength is already reversed or the strength is actually continue into the first quarter. Just wonder if you can share how many old gamers that you have successfully brought back. Can you remind us on the deferred schedule for the PC games, how will that actually be benefiting the strength in 4 Q, should that also benefit 1 Q and also second quarter? Any expansion pack release planning later this year that you can share? This is on the gaming. Second question is related to the overall advertising outlook. I'm not sure Charles or management have any view so far in terms of some of the sentiment, in terms of the ad budget this year versus last year. For the fourth quarter, could you also remind us which category actually performed well during the quarter and which quarter actually from your indication you know will have a stronger recovery in 2021? Thank you. Okay, Alicia. Your first question about the gaming and about the special servers and the PC, the special server, and all the gamers brought back. Obviously, it contributed mostly in the Q4 and the trend continue a little bit, but definitely fall back a little bit, right? On Q1. Maybe Dewen or [crosstalk]. [Non-English content] Hi, Alicia. For the TLBB Vintage, we call those special servers. The content is very welcomed by those hardcore players that we lost over years, like 10 years ago. The total number of the returning users is not so big, but they are really hardcore, and with the consumption level this quarter is far beyond our expectations. We expect in the first quarter, there will be a natural decline for the TLBB Vintage, and also considering the festival traveling factors. We see the guidance is pretty conservative. [Non-English content] In terms of active players, we see the operating numbers are quite stable currently speaking. [Non-English content] Actually, players in two versions are pursuing totally different experiences. In the future, we will apply different operating strategies. For regular TLBB PC, we will make more evolutionary expansions like before. For TLBB Vintage, we'll keep the classic content and make some strong social and further updates based on player feedback. [Non-English content] For the regular TLBB PC, it's focused more on PVP, player versus player fighting events. For the TLBB Vintage, we will be focusing on more casual, more social things. 我们预计第二季度会推出天龙怀旧版的资料片，谢谢。 We plan to launch the first expansion pack for TLBB Vintage in the second quarter of 2021. Okay. All right. About advertising outlook. I think the total macroeconomic situation, I'm not sure. Maybe a little bit better than 2020. Since it actually doesn't matter to Sohu because our advertising revenue base is relatively small, so it really depends on how well we do. We'll continue the trend in 2020 because of our development of the live broadcasting technology and live streaming applied to various marketing events and created some value for advertisers so that we achieved not only recover from Q1 as the pandemic recede, and Q2 and Q3 and Q4, we actually achieved a slow growth. That trend, I believe that in 2021, we'll continue that slow growth with our strategy of live broadcasting and all those kind of things and the events. Based on that, and there's a big if we can have our product innovation, like our Sohu News app and the Sohu Video app, and innovation so that the user base can grow organically or even have an uptake without heavy spending on pre-installment to devices or online stores. Without channel marketing, basically our strategy is really continue to have cost control to basically not much more spending, but through the product innovation, especially our social media feature introduction into our APP. So that we can grow our user base without much additional cost, but grow user base and the user base grow largely. Then we can grow our revenue faster than the pace that we did in 2020. It's a big if, depending on whether our product innovation will be successful or not. Okay. The categories are mostly auto, right? Auto and FMCG. Yes. It will be commerce, basically. Yes. Thank you, Charles. Thank you for the question. Once again, to ask a question, you can still press star one for your name to be announced. The next question comes from the line of Thomas Chong of Jefferies. Please go ahead. Hi. Thanks management for taking my questions. My question is about advertising as well, but on the video side. Given that we have been seeing the COVID-19 breakout, should we expect there might be a delay in terms of the production timeline or the release timeline for this year? On that front, how should we see the competition in long-form video advertising versus the short-form video advertising? Are we seeing short-form video advertising actually affects the advertising budget sweep to our portal and video? My follow-up question is about the non-g ame operating line. If we strip out the gaming business, how should we think about the fundamentals or the operating loss for the non-g ame business? When should we expect profitability or breakeven? Thank you. Yeah. First of all, the advertising long-form. First of all, the production. 2020, the first half, because of the pandemic, we didn't have much filming. Then in later part, we produced a few drama episodes. Now I think we have five, right? Five in total. We already start one in January, then we'll have another one. We have a pipeline of a few dramas lining up for this year. Also we are also producing more. Basically this year we'll probably have 10, right? 10 dramas. That actually mostly will drive the subscription business. For advertising, our video advertising actually now does not depend that much on our long-form drama because most people subscribe, users, the subscription. Subscribers do not see advertising, right? Our video advertising mostly depend on some of our Okay, yeah. They do advertise on our variety shows, right? Variety shows. Variety shows. Also some of the live broadcasting events and the short form. Sohu Video also have this twin strategy. We are actually actively developing this social media type of short-form video. You basically will see about 10 dramas this year, and then we'll continue to drive our subscription business growth. Advertising will not depend on that much on the production of long-form drama, but on some variety shows and also short form and live streaming events. We'll see a gradual, slow growth of our advertising and also, I think a strong growth of our subscription. Non-game business, when will we break even? That also depend on what I just said, is first of all, in the last two years, we've been able to effectively cut costs almost by half, right? The media platform basically now have a quarterly loss around or even below $40 million a quarter. That's why with the game uptake, we can achieve profitability. Looking forward, we hope that the innovation and the product innovation is not only in the editorial distribution content and also algorithm or the recommendation distribution. Also the third one, it's most important one, is the social media distribution. If we can achieve that, and basically we can achieve our product user base without much spending, basically through product innovation, so that form attraction and then user growth. Both advertising and the [subscription] business will grow much faster. That will determine when we'll break even with the media non-game business. That is really depend on when we talk about to innovate, we're not just talk, generally speaking, innovation and product innovation. We really mean it. It's very detailed, very detailed user experience and also the product design and development. We're working and we hope that we'll be successful, and I hope the turning point for the product uptake is really this year. Got it. Thank you. Thank you for the questions. Our next question comes from the line of John Choi of Daiwa Capital Markets. Please go ahead. Hi, Charles and Joanna Lu. Thanks a lot for letting me ask my question, and congratulations for a strong quarter. My question relates, I know you're not allowed to comment much on Sohu. I just want to pick your brains on a hypothetical case. In case the deal goes through and you receive the cash allocation, just wondering how are you thinking about the future investments in terms of the breakdown? What are the specific projects you are planning to allocate to, just to give, I think, the investors an idea? Well, hypothetically, if we have the cash, we can do both. Now without the cash, we can only grow our products and user base by organic, by product innovation with the new features and this. With more cash, we can do both. We can do marketing and pre-installment so that our user base can grow faster. Definitely, in terms of the product innovation, we definitely can get into more areas like delivering news and content, and explore it, AI-enabled voice. There's more features. Now we are basically assuming that do everything, because in such a last few years experience, we are really improve the operation efficiency so that we try to do things with the low budget. We hope that we'll continue this. We always assume that we don't have the money, we will just really work on product innovation. spend less on the pre-installment or on the app stores and all those things, really to see whether the product itself can attract the user. I see. Still, just based upon that hypothetical scenario, I was wondering in terms of M&A acquisitions and potentially maybe a special dividend or dividend policy, has your outlook on these kind of things changed over the last few months? How are you thinking about these type of allocations? Well, I think we are quite conservative, so we will only think about those things when we have the money. Okay. Just the last question from me is, in terms of the innovation projects that you're pursuing, maybe can you help us understand a bit more, what's the progress here? What kind of team are you building? Are you hiring some new people to help with the progress? It's more of the current team. Basically promotion of the people, a member of the team, the really the good one to rise to the task. It's more also an organic process instead of just set up a new department. It's product innovation environment is really something very detailed and very daily work. We're hiring more people, but we're just gradually evolve the team. On the product side, basically, as I said, we focus on the three distribution of content, delivery of content, basically editorial, algorithm, and the social media. We focus more on social network side aspects. Also with social network, social media aspects with this 4G or 5G era, so that we are looking at more of a video or the video streaming type of video type of content. Also to fabric, to evolve the video content and live streaming kind of into our social networking network product. Got it. Thanks very much, Charles. Thank you for the questions, ladies and gentlemen. With that concludes the conference for today. Thank you for your participation. You may now disconnect.