Core Viewpoint - The online dating industry, once revolutionized by apps like Tinder, is facing significant challenges as user engagement declines and competition from niche platforms and social media increases [3][6][10]. Group 1: Industry Evolution - The first online dating site, Match.com, launched in 1995, but it wasn't until Tinder's introduction of the "swipe" feature in 2012 that online dating gained mainstream popularity [2][3]. - Match Group, Tinder's parent company, went public in 2015 and acquired several dating apps, becoming a leading player in the online dating market [3]. - During the pandemic, online dating usage surged, with Match Group's market value peaking near $50 billion [3]. Group 2: User Engagement Decline - Recent data shows that daily usage of dating apps in the U.S. has dropped from 100 minutes to about 50 minutes over the past decade [3]. - Tinder's parent company, Match Group, has seen its stock price fall by over 66% in the last five years, leading to significant layoffs and a CEO change [3][5]. - Bumble, another competitor, has experienced a nearly 95% drop in market value [3]. Group 3: User Sentiment and Safety Concerns - A Forbes survey indicates that nearly 80% of respondents feel fatigued by dating apps, with many viewing online dating as a chore rather than an enjoyable activity [4]. - Safety concerns persist, with about 50% of Americans believing dating apps are unsafe, and over half of users reporting experiences of deception [4]. Group 4: Subscription Services and User Retention - Over 30% of Americans have subscribed to paid dating app services, with Tinder offering various membership tiers, some costing up to $499 per month [5]. - Match Group's recent financial reports show a 5% decline in paid users, marking the tenth consecutive quarter of decline, with over 700,000 users lost in the past year [5]. Group 5: Shift in User Preferences - Nearly half of U.S. users are seeking long-term relationships, with Gen Z showing the highest preference for such connections [6]. - Niche dating apps like Hinge, which focus on serious relationships, are gaining traction, while platforms like TikTok and Instagram are increasingly used for dating [6][7]. Group 6: Rise of Offline Dating Events - Post-pandemic, there is a resurgence in offline dating events, with many brands organizing activities for singles, which are becoming popular among younger demographics [8][9]. - New startups focusing on offline social activities are emerging, indicating a shift away from traditional online dating [9]. Group 7: Challenges in the Chinese Market - Similar challenges are faced by dating apps in China, with platforms like Momo and Tantan experiencing user declines due to regulatory issues and shifting user preferences [10]. - Momo's paid user count has dropped by 40% year-on-year, reflecting broader trends in the online dating landscape [10].

Core Thesis - Hello Group Inc. (MOMO) is viewed as a compelling contrarian investment opportunity despite facing near-term regulatory challenges in China [2][4] Financial Performance - As of September 17th, MOMO's share price was $7.73, with trailing and forward P/E ratios of 11.50 and 6.44 respectively [1] - The company reported a 2% year-over-year decline in sales and a loss of $20 million, compared to a net profit of $55 million a year ago [3] - The decline in profits was primarily due to a new tax regime in China, which increased the company's tax burden to approximately 25-30% from previous levels near 20% [3] Cash Flow and Shareholder Returns - MOMO generates significant free cash flow and has historically returned capital to shareholders through dividends and share buybacks [2][4] - Over the past year, the company repurchased around 50 million ADS, reducing its share count by nearly 20%, while maintaining a dividend of $0.30 per share [2] - The intrinsic value of MOMO remains strong, with a book value of $9.22 per ADS, cash of $9.38 per ADS, and net cash of $4.75 per ADS, indicating the stock trades below its net cash-adjusted value [2] Investment Outlook - The combination of strong cash generation, shareholder-friendly capital allocation, and trading below intrinsic value positions MOMO as an attractive investment [4] - If the company returns to historical dividend levels closer to 10% and continues opportunistic buybacks, it offers both income and upside potential with limited downside risk [4]

Core Viewpoint - Hello Group Inc. (formerly Momo) is attempting to reverse a five-year revenue decline by introducing AI-backed features in its dating app, but recent financial results indicate continued revenue challenges [2][5][17] Financial Performance - The company's revenue fell 2.6% year-on-year in the second quarter to 2.62 billion yuan ($368 million), down from 2.69 billion yuan a year earlier [5][7] - In the first quarter, revenue had only declined by 1.5%, suggesting a potential for recovery that has not materialized [5] - For the third quarter, Hello Group forecasts revenue between 2.59 billion yuan and 2.69 billion yuan, indicating a possible decline of 3.2% at the low end and a slight increase of 0.6% at the high end [6] - The company reported its first net loss in over three years, amounting to 139 million yuan, primarily due to one-time tax expenses [8][15] User Engagement and Features - The newly introduced AI greeting feature aims to assist male users in crafting personalized messages for potential dates, which is expected to enhance user engagement [3][4] - The AI chat assistant feature is designed to improve ongoing conversations, potentially increasing retention rates among users [4] - Despite these innovations, the company has not yet seen a halt in revenue decline, contrasting with other consumer-facing companies in China that have stabilized [4][17] User Metrics - Paid users for the Momo app decreased by approximately 15% sequentially to 3.5 million in the second quarter, while Tantan's paid users fell by about 10% to 740,000 [13] - The value-added services for the Momo app experienced an 11% year-on-year decline, dropping to 1.85 billion yuan, which constitutes about 70% of total revenue [12] International Business - Hello Group's international business saw a significant revenue increase of 73% year-on-year in the second quarter, contributing 17% to total revenue, up from 9.5% a year earlier [14] - However, growth in the international segment is expected to slow to the mid-60% range in the third quarter as the company adopts a more conservative expansion strategy [14] Market Sentiment - Following the release of the latest financial report, Hello Group's stock fell by 7.3%, erasing most of its gains for the year, although it remains up 17% over the past 52 weeks [9] - Analysts are mixed on the company's outlook, with six out of eight still rating it a "buy," while the stock trades at a low price-to-earnings (P/E) ratio of 11 compared to global peers [16]

Core Viewpoint - Momo, once a leading dating app, is experiencing a significant decline in user engagement and revenue, particularly among younger demographics, as it struggles to adapt to changing social preferences and competition from newer platforms [1][3][4]. Group 1: Financial Performance - Momo's total revenue for Q2 was 2.62 billion yuan, a year-on-year decrease of 2.6%, marking the 22nd consecutive quarter of revenue decline since Q4 2020 [1]. - The number of paying users has plummeted from 7.2 million to 3.5 million year-on-year, representing a 51.4% decrease [1]. - The monthly active users of Momo's other dating app, Tantan, fell from 12.9 million to 10.2 million, with paying users dropping by 30% to 700,000 [1]. Group 2: User Demographics and Preferences - Momo's user base is increasingly skewed towards older demographics, with over 75% of users aged 25 and above, and nearly half of male users aged 41 and older [9]. - The app's original model, which focused on location and appearance, is now considered outdated by younger users who prefer connecting based on shared interests and values [4][9]. - The shift in user demographics has led to Momo becoming a platform primarily for middle-aged and older users, with a notable lack of engagement from younger individuals [4][10]. Group 3: Revenue Streams and Challenges - Momo's revenue has heavily relied on live-streaming services, which have seen a decline due to regulatory scrutiny and competition from platforms like Douyin and Kuaishou [10]. - The spending habits of older users are less robust compared to younger users, making it difficult for Momo to sustain its financial performance [10]. - The company is attempting to control costs to mitigate revenue decline but is still searching for effective strategies for recovery [12].

Index Performance - The HSI closed at 26,200, up 1.0% in one day and 30.6% year-to-date [1] - The HSCEI closed at 9,328, up 0.9% in one day and 28.0% year-to-date [1] - The HSCCI closed at 4,377, up 0.6% in one day and 15.8% year-to-date [1] - The MSCI HK closed at 13,646, up 1.2% in one day and 29.2% year-to-date [1] - The MSCI CHINA closed at 86, up 0.6% in one day and 33.1% year-to-date [1] - The FTSE CHINA A50 closed at 14,844, up 0.5% in one day and 9.9% year-to-date [1] - The CSI 300 closed at 4,445, up 0.2% in one day and 13.0% year-to-date [1] - The TWSE closed at 25,193, up 1.4% in one day and 9.4% year-to-date [1] - The SENSEX closed at 81,101, up 0.4% in one day and 3.8% year-to-date [1] - The NIKKEI 225 closed at 43,838, up 0.9% in one day and 9.9% year-to-date [1] - The KOSPI closed at 3,315, up 1.7% in one day and 38.1% year-to-date [1] - The ASX 200 closed at 8,805, down 0.2% in one day and up 6.4% year-to-date [1] - The DJIA closed at 45,491, down 0.5% in one day and up 6.9% year-to-date [1] - The S&P 500 closed at 6,532, up 0.3% in one day and 11.1% year-to-date [1] - The FTSE 100 closed at 9,225, down 0.2% in one day and up 12.9% year-to-date [1] Commodity Price Performance - Brent Crude closed at US$68/bbl, up 1.8% in one day and down 6.2% year-to-date [2] - Gold closed at US$3,641/oz, up 0.4% in one day and 38.7% year-to-date [2] - Copper closed at US$9,914/t, unchanged in one day and up 13.1% year-to-date [2] - Aluminum closed at US$2,626/t, up 0.2% in one day and 3.9% year-to-date [2] - Nickel closed at US$14,917/t, down 0.8% in one day and 1.3% year-to-date [2] - CH domestic steel rebar 25 closed at RMB3,244/t, unchanged in one day and down 9.1% year-to-date [2] - CH domestic high speed wire closed at RMB3,614/t, down 0.1% in one day and 5.1% year-to-date [2] - CH domestic hot rolled steel closed at RMB3,420/t, down 0.1% in one day and 1.5% year-to-date [2] - CH domestic cold rolled steel closed at RMB3,914/t, unchanged in one day and down 6.7% year-to-date [2] - The BDI index closed at 2,019, unchanged in one day and up 102.5% year-to-date [2] Key Macro and Earnings Releases - US Initial Jobless Claims were 237.0k, higher than the consensus of 235.0k [3] - US Continuing Jobless Claims were 1,940.0k, lower than the consensus of 1,950.0k [3] - US CPI urban consumers MoM was 0.2%, lower than the consensus of 0.3% [3] - US CPI urban consumers YoY was 2.7%, lower than the consensus of 2.9% [3] - US CPI urban consumers was 323.0, lower than the consensus of 323.9 [3] - The Univ. of Michigan Sentiment was 58.2, higher than the consensus of 58.0 [3] - US Treasury Federal Budget Deb was -$291.1 billion, better than the consensus of -$340.0 billion [3] - FOF Federal Reserve US Household was -1,594.6% [3] - US Empire State Manufacturing was 11.9, higher than the consensus of 4.9 [3] - US Import Price Index Chg was 0.4% [3] - US Import Price Index YoY was -0.2% [3] - US capacity utilization was 77.5%, higher than the consensus of 77.4% [3] - US Industrial Production MoM was -0.1%, lower than the consensus of 0.0% [3] - US Industrial Production Indus MoM was 0.0% [3] - US Manufacturing & Trade Inven Mon was 0.2%, in line with the consensus [3] - Adjusted Retail & Food Service Mon was 0.5%, higher than the consensus of 0.3% [3] - Adjusted Retail Sales Less Auto MoM was 0.2%, lower than the consensus of 0.5% [3] Key BOCI Events - Zhou Liu Fu (Tencent Meeting at 10:30am) 6168.HK on 11 Sep [4] - BOCI Online Expert Seminar - Innovative Drug Lecture - Targeting the New Future Series IX: WCLC Innovative Drug Data Interpretation (Tencent Meeting at 4:30pm) on 11 Sep [4] - BOCI Online Expert Seminar - Domestic Server Industry Landscape and Outlook (Tencent Meeting at 4:30pm) on 11 Sep [4] - BOCI Online Expert Seminar - Overseas Hard Tech Seminar: Focus on AI ASIC Chip Thermal Design (Tencent Meeting at 3:30pm) on 11 Sep [4] - Raphael Chen - Internet Sector Marketing (1x1) in HK on 11 - 12 Sep [4] - Tony Fei - Power Sector Marketing (1x1) in SH on 15 - 16 Sep [4] - Raphael Chen - Media Sector Marketing (1x1) in SH on 18 - 19 Sep [4] - Luk Fook (Tencent Meeting at 11am) 0590.HK on 25 Sep [4] - Fortior Tech 峰岹科技 (1x1, Group Lunch) 1304.HK/688279.CH on 26 Sep [4] China Economy - In August, CPI edged down 0.4% YoY after being unchanged in July, while core CPI grew 0.9% YoY, up 0.1ppt from July [5][7] - The "industrial anti-involution" policy further took effect in August, improving the prices of durable goods CPI and some raw material PPI growth [5][7] - PPI dropped 2.9% YoY in August after falling 3.6% YoY in July, and the growth trend of both CPI and PPI is expected to gradually pick up amid the low base last year, narrowing the decline of GDP deflator [6][7] Hello Group Inc - The company's rating is HOLD, with a target price of US$8.30 and a current price of US$7.88 [8] - In 2Q25, the topline was -3% YoY, meeting BOCIe. Excluding non-recurring RMB548m accrual withholding tax, adj. NPM was 17.2%, beating consensus [8] - ROI remains the top assessment benchmark for operating domestic core Momo, Tantan and overseas businesses in 2H25. The company is expected to dynamically increase the revenue sharing ratio for core Momo in 2H25 to offset the negative impact of strict tax scrutiny [9][10] - The company will implement a more prudent model for its overseas expansion in 2H25 [9][10]

Group 1: MOMO US - The operating profit exceeded expectations, with overseas new products maintaining strong growth momentum [1] - Revenue for Q2 2025 was 2.62 billion yuan, a year-on-year decrease of 3%, while adjusted operating profit was 450 million yuan, surpassing the expected 390 million yuan due to better-than-expected cost control and marketing channel optimization [1] - Overseas revenue continued to expand, increasing by 73% year-on-year, accounting for 17% of total revenue [1] Group 2: Future Outlook for MOMO US - Revenue for Q3 2025 is expected to decline by 2% year-on-year, with the impact of stricter compliance on streamer taxes leading to potential increases in revenue-sharing incentives [2] - Overseas revenue is projected to grow by 62% year-on-year, with products like Amar and Yaahlan expected to maintain strong growth [2] - Adjustments to net profit expectations for 2025/26 have been made due to potential new product marketing investments and changes in dividend withholding tax rates [2] Group 3: SF Express (9699 HK) - The company is experiencing continuous profit release under diversified layouts, with a buy rating maintained [3] - Revenue growth for 2025-27 has been revised upward by 14%/12%/12% to 22 billion - 30.4 billion yuan, with year-on-year growth rates of 40%/20%/15% [3] - Profit forecasts for 2025-27 have been increased by 26%/23%/27% to 340 million - 760 million yuan, with Non-IFRS net profit margins of 1.5%/2%/2.6% [3] Group 4: Future Outlook for SF Express - SF Express is expected to benefit from a rational return of subsidies in the takeaway market, with significant business space remaining [4] - The target price has been adjusted to 15.4 HKD based on a rolling valuation to 2026, corresponding to 0.5 times the sales ratio [4] Group 5: Consumer Industry Overview - The consumer market in mainland China showed moderate recovery in the first half of 2025, with structural differentiation in performance across segments [8] - Key trends include the leading performance of experiential consumption, revenue growth from global expansion strategies, and operational efficiency becoming a critical factor for profit differentiation [8][9] - Recommendations include focusing on players capturing consumer trends with high growth potential, such as Pop Mart (9992 HK), and industry leaders with stable fundamentals like Midea (000333 CH), Anta (2020 HK), and Yili (600887 CH) [8] Group 6: Automotive Industry Overview - The penetration rate of new energy vehicles reached 55.2% in August, with retail sales of passenger cars hitting a historical high of 1.995 million units [12] - The export of passenger cars, including new energy vehicles, maintained good growth momentum, with 204,000 new energy vehicles exported in August, accounting for 40.9% of total exports [13] - The upcoming launch of multiple new models in Q3-Q4 2025 is expected to enrich market supply and boost sales during the traditional peak season [13][14]

Core Viewpoint - Hello Group Inc. reported a decline in net income and operating profit for the second quarter of 2025, despite a significant increase in overseas revenue, indicating challenges in its domestic operations and cost management [2][3][6]. Financial Performance - For Q2 2025, total net revenues were RMB 26.2 billion (approximately USD 3.66 billion), a decrease of 2.6% from RMB 26.91 billion in Q2 2024 [5][6]. - The operating profit for Q2 2025 was RMB 4.04 billion (approximately USD 563 million), down 5.9% from RMB 4.25 billion in the same period last year [11][13]. - Net loss for Q2 2025 was RMB 1.39 billion (approximately USD 195 million), compared to a net profit of RMB 3.98 billion in Q2 2024, marking a decline of 145.5% [14][16]. Revenue Breakdown - Domestic revenue for Q2 2025 was RMB 21.779 billion (approximately USD 3 billion), a decrease of 10.56% from RMB 24.351 billion in Q2 2024, primarily due to declines in revenue from Momo and Tantan apps [6][9]. - Overseas revenue reached RMB 4.42 billion (approximately USD 618 million), a significant increase of 72.7% from RMB 2.563 billion in the previous year, driven by growth from Souchill and emerging brand revenues [6][10]. Cost and Expenses - Total costs and expenses for Q2 2025 were RMB 22.28 billion (approximately USD 3.11 billion), a decrease of 2.1% from RMB 22.75 billion in Q2 2024 [7][9]. - The reduction in costs was attributed to ongoing cost control measures and a decrease in marketing expenses for Tantan, although this was partially offset by increased marketing costs for overseas applications [10]. Tax and Liabilities - The company recorded a significant increase in income tax expenses for Q2 2025, amounting to RMB 6.384 billion (approximately USD 891 million), compared to RMB 1.026 billion in Q2 2024, due to a tax rate adjustment for Momo Beijing [13]. - As of June 30, 2025, total liabilities were RMB 55.22 billion (approximately USD 7.7 billion), while shareholder's equity stood at RMB 110 billion (approximately USD 15.35 billion) [19]. Future Outlook - Hello Group Inc. expects total net revenues for Q3 2025 to be between RMB 25.9 billion and RMB 26.9 billion, reflecting a year-over-year decline of 3.2% to a growth of 0.6% [20].

Financial Data and Key Metrics Changes - Total group revenue for Q2 2025 was RMB 2.62 billion, down 3% year-over-year but up 4% quarter-over-quarter [19] - Domestic revenue reached RMB 2.18 billion, down 11% year-over-year, while overseas revenue was RMB 442 million, up 17.3% year-over-year [4][19] - Adjusted operating income was RMB 448 million, down 6% from Q2 last year, with a margin of 17% [4][23] - Non-GAAP net loss was RMB 96 million compared to RMB 449.2 million from the same period in 2024 [19] Business Line Data and Key Metrics Changes - MoMo app had 3.5 million paying users, a sequential decrease of 0.6 million due to user acquisition investment cuts [8] - MoMo VAS revenue reached RMB 1.85 billion, down 11% year-over-year, primarily due to soft spending sentiment among high-paying users [9] - Tang Tang's MAU reached 10.2 million, down 5% from last quarter, with 720,000 paying users, a decrease of 80,000 from Q1 [11] - Revenue from Tang Tang's onshore business in Q2 was RMB 116 million, down 18% year-over-year [12] Market Data and Key Metrics Changes - Overseas revenue accounted for 17% of total group revenue compared to 10% in the same period last year [15] - Overseas revenue reached RMB 442 million, up 17.3% year-over-year and 7% quarter-over-quarter, driven by audio and video-based social products in the MENA region [15] Company Strategy and Development Direction - Key priorities for 2025 include maintaining MoMo's productivity, improving Tang Tang's core dating experience, and deepening overseas market presence [4] - The company aims to balance growth and profitability, especially in overseas markets, while being cautious about user acquisition costs [16][17] Management's Comments on Operating Environment and Future Outlook - Management expects MoMo's overall revenue and profit in the second half of the year to be relatively controllable, despite potential pressures from new tax regulations [34] - The company anticipates a year-over-year growth of around 60% for overseas revenue in Q3, with a focus on optimizing user acquisition costs [49] Other Important Information - The company accrued an additional withholding income tax of RMB 547.9 million related to dividends, which is a one-off item and does not reflect normal business operations [19][24] - Cash reserves decreased to RMB 12.39 billion as of June 30, 2025, primarily due to loan repayments and cash dividends paid to shareholders [25][26] Q&A Session Summary Question: Can management discuss the second half outlook for MoMo and the strategy on AI application? - Management indicated that MoMo's situation in the second half should be controllable, with a focus on enhancing user experience through AI tools [32][36] Question: Can management elaborate on the measures taken to restructure Tang Tang's membership package? - Management explained that user classification and tailored monetization strategies were implemented to mitigate revenue pressure from product upgrades [41][42] Question: What are management's views on the sustainability of overseas revenue growth? - Management expressed confidence in the sustainability of overseas growth, expecting a moderation in growth rates but continued strong performance from emerging brands [47][49] Question: Will there be changes in profit margin due to the withholding tax issue? - Management noted potential fluctuations in revenue and gross margins due to tax scrutiny but emphasized that overall effects should remain manageable [53][55]

Financial Data and Key Metrics Changes - Total group revenue for Q2 2025 was RMB 2.62 billion, down 3% year-over-year but up 4% quarter-over-quarter [19] - Adjusted operating income was RMB 448 million, down 6% from Q2 last year, with a margin of 17% [4] - Non-GAAP net loss was RMB 96 million compared to RMB 449.2 million from the same period of 2024 [19] Business Line Data and Key Metrics Changes - Domestic revenue reached RMB 2.18 billion, down 11% year-over-year, while overseas business revenue was RMB 442 million, up 17.3% year-over-year [4] - MoMo app had 3.5 million paying users, a sequential decrease of 0.6 million due to user acquisition investment cuts [8] - Revenue from Tang Tang's onshore business in Q2 was RMB 116 million, down 18% year-over-year [11] Market Data and Key Metrics Changes - Overseas revenue accounted for 17% of total group revenue compared to 10% in the same period last year [15] - Overseas revenue reached RMB 442 million, up 17.3% year-over-year and 7% quarter-over-quarter, driven by audio and video-based social products in the MENA region [15] Company Strategy and Development Direction - Key priorities for 2025 include maintaining MoMo's productivity, improving Tang Tang's core dating experience, and deepening overseas market presence [4] - The company aims to balance growth and profitability, especially in overseas markets, while being cautious about user acquisition costs [16] Management's Comments on Operating Environment and Future Outlook - The overall revenue and profit for MoMo in the second half of the year is expected to be relatively controllable, with no significant deterioration in consumer sentiment [34] - The company anticipates a year-over-year growth of around 60% for overseas revenue in Q3, with a focus on optimizing user acquisition costs [50] Other Important Information - The company accrued an additional withholding income tax of RMB 547.9 million related to dividends, which is a one-off item and does not reflect normal business operations [19][24] - Cash reserves decreased to RMB 12.39 billion as of June 30, 2025, primarily due to loan repayments and cash dividends paid to shareholders [25] Q&A Session Summary Question: Can management discuss the second half outlook for MoMo and the strategy on AI application? - Management indicated that MoMo's situation in the second half should be controllable, with industry-wide compliance being beneficial for long-term stability [32] - AI is being integrated into existing social products to enhance user experience, with significant efforts in AI-assisted icebreaking and a standalone AI character role-playing chat app launched in Japan [36][37] Question: What measures have been taken to mitigate the impact of Tang Tang's product upgrade on paying ratios? - Management explained that user classification and tailored monetization strategies were implemented to address revenue pressure from the product upgrade [41][42] Question: What are the expectations for the sustainability of overseas revenue growth? - Management noted that while year-on-year growth may slow slightly, overseas dating products are expected to continue performing well, with a focus on optimizing user acquisition costs [48][50] Question: Will there be changes in profit margin due to the withholding tax issue? - Management stated that fluctuations in revenue and gross margins are expected, particularly in Q3 and Q4, but overall effects should remain manageable [53][56]

Financial Data and Key Metrics Changes - Total group revenue for Q2 2025 was RMB 2.62 billion, down 3% year-over-year but up 4% quarter-over-quarter [20] - Domestic revenue reached RMB 2.18 billion, down 11% year-over-year, while overseas business revenue was RMB 442 million, up 17.3% year-over-year [5][20] - Adjusted operating income was RMB 448 million, down 6% from Q2 last year, with a margin of 17% [5][24] - Non-GAAP net loss was RMB 96 million compared to RMB 449.2 million from the same period of 2024 [20] Business Line Data and Key Metrics Changes - MoMo app value-added service revenue was RMB 1.85 billion, down 11% year-over-year due to soft spending sentiment among high-paying users [10] - Tang Tang's revenue from the onshore business in Q2 was RMB 116 million, down 18% year-over-year [12] - Overseas revenue from value-added services was RMB 440.7 million, up 73% year-over-year [21] Market Data and Key Metrics Changes - Overseas revenue accounted for 17% of total group revenue compared to 10% in the same period last year [16] - Tang Tang's MAU reached 10.2 million, down 5% from last quarter [12] - The RP pool for Tang Tang increased 18% year-over-year, partially offsetting revenue pressure [13] Company Strategy and Development Direction - Key priorities for 2025 include maintaining MoMo's productivity, improving Tang Tang's core dating experience, and deepening overseas market presence [5] - The company aims to balance growth and profitability, especially in overseas markets, while being cautious about user acquisition costs [17][18] - The focus on AI applications includes enhancing user experience and developing new products, such as a standalone AI character role-playing chat app in Japan [36][38] Management Comments on Operating Environment and Future Outlook - Management expects the second half of the year to be relatively controllable for MoMo, with no significant deterioration in consumer sentiment [33][35] - The company anticipates a year-over-year decline in domestic revenue in the low teens, while overseas revenue is expected to grow around 70% for the year [55] - Recent tax scrutiny may impact revenue and gross margins, but adjustments in revenue sharing policies are being made to mitigate these effects [54][56] Other Important Information - The company accrued an additional withholding income tax of RMB 547.9 million related to dividends, which is a one-off item [25][26] - Cash reserves decreased to RMB 12.39 billion as of June 30, 2025, primarily due to loan repayments and cash dividends [27] Q&A Session Summary Question: Can management discuss the second half outlook for MoMo and the strategy on AI application? - Management indicated that the situation for MoMo is controllable, with a stable consumer sentiment and regulatory environment [33][34] Question: What measures have been taken to mitigate the impact of the product upgrade on Tang Tang's paying ratios? - Management explained that user classification and tailored monetization strategies were implemented to address revenue pressure from the product upgrade [42][43] Question: What are the expectations for the sustainability of overseas revenue growth? - Management noted that while growth may moderate slightly, overseas business is expected to continue delivering robust growth, particularly from new brands [48][50] Question: Will there be changes in profit margins due to the withholding tax issue? - Management stated that there could be fluctuations in revenue and gross margins, but overall effects should remain manageable [54][56]