Company Overview - TME is committed to the healthy development of China's online music industry[7] - TME has a large user base, innovative product matrix, comprehensive content library, and diversified monetization methods[11] - TME has over 260 million music and audio tracks[12, 15] and over 580,000 indie musicians[12] Business Overview - TME has partnerships with hundreds of domestic and international music labels[15] - TME cultivates and empowers indie musicians through the Tencent Musician Platform[17] - TME utilizes LLMs & industry-pioneered licensed AI features to enhance promotion, distribution and copyright protection[18] - TME's platform caters to varying needs of music consumers, with online music paying users reaching 122.9 million and a paying ratio of 22.1% in 1Q25[8, 24] Financial Highlights - TME's total cash, cash equivalents, term deposits, and short-term investments amounted to RMB 37.67 billion as of March 31, 2025[12, 45] - TME's LTM 2025 total revenues were RMB 29.0 billion with a 29.5% LTM 2025 adjusted net margin[12] - TME's 1Q25 revenue from music subscriptions was RMB 5.80 billion, a 16.6% year-over-year increase[34] - TME's 1Q25 online music monthly ARPPU was RMB 11.4, a 7.5% year-over-year increase[12, 34] - TME's 1Q25 Non-IFRS net profit was RMB 2.23 billion, a 22.8% year-over-year increase[34]

Company Overview - TME boasts a large user base and innovative technology, holding 4 out of the top 5 music mobile apps in China[15] - The platform has an extensive content library with over 260 million music and audio tracks[15] - TME's online music subscribers reached 121 million in 4Q24, demonstrating a year-over-year growth of 134%[12] - The company reported total cash, cash equivalents, term deposits, and short-term investments of RMB 3758 billion as of December 31, 2024[14] - TME's last twelve months (LTM) total revenues as of December 31, 2024, were RMB 284 billion, with an adjusted net margin of 286%[14] Business Overview - TME has partnerships with hundreds of domestic and international music labels, offering a diversified music library[17] - The platform cultivates and empowers indie musicians through the Tencent Musician Platform[19] Financial Highlights - In 4Q24, revenue from music subscriptions reached RMB 403 billion, an increase of 180% year-over-year[37] - 4Q24 revenue from other online music services was RMB 180 billion, up 121% year-over-year[37] - The online music monthly ARPPU for 4Q24 was RMB 111, a 37% year-over-year increase[38] - Non-IFRS net profit for 4Q24 was RMB 240 billion, showing a significant increase of 430% year-over-year[38] - The company's gross margin for 4Q24 was 436%, a 53 percentage point increase year-over-year[37]

Financial Data and Key Metrics Changes - In Q1 2025, Tencent Music Entertainment Group (TME) reported revenues of RMB 7.4 billion, reflecting a 9% year-over-year growth [22] - Online music revenues increased by 16% year-over-year to RMB 5.8 billion, driven by strong growth in music subscription and advertising revenues [22] - Music subscription revenues reached RMB 4.2 billion, representing a 70% year-over-year increase and a 5% sequential rise [23] - The gross margin improved to 44.1%, up 3.2 percentage points year-over-year, attributed to strong subscription and advertising revenue growth [27] Business Line Data and Key Metrics Changes - The music subscription business remains the cornerstone of TME's revenue, with significant growth in SVIP membership and reduced promotional activity contributing to revenue increases [23][31] - Advertising revenues showed strong year-over-year growth, primarily due to the success of the ad-supported model [24] - Artist-related merchandise sales and offline performances also contributed to revenue growth, with notable sales from physical albums and concerts [25] Market Data and Key Metrics Changes - The company has strengthened partnerships with record labels, enhancing its music library and user engagement through exclusive content and immersive audio experiences [6][7] - There is a growing popularity of diverse music genres, including Korean, English, and Japanese tracks, indicating a shift in user preferences [9] - The company is expanding its presence in the international market, particularly in Southeast Asia, to capture growth opportunities [76] Company Strategy and Development Direction - TME is focused on high-quality growth in its music business, expanding SVIP memberships, and diversifying offerings across the music value chain [31] - The company aims to enhance user engagement through innovative technologies and original content production [31] - TME is committed to building a comprehensive content ecosystem and improving operational efficiency to sustain growth [12][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the 2025 outlook, expecting year-over-year growth rates to accelerate and margins to expand [36] - The company is optimistic about the long-term potential of the music industry and plans to continue investing in high-quality content and user engagement [31] - Management highlighted the importance of adapting to user preferences and market dynamics to drive future growth [41][53] Other Important Information - TME released its 2024 ESG report, detailing practices in intellectual property protection, user privacy, and fostering diverse music communities [12] - The company declared a cash dividend of US$0.09 per ordinary share for the year ended December 31, 2024, with payments made in April 2025 [31] Q&A Session Summary Question: Outlook for top line profit growth for the next quarter and full year 2025 - Management expressed confidence in achieving strong results in Q1 and expects full-year growth to accelerate, driven by rich service offerings and user engagement [36] Question: Growth opportunity of podcasts in China and long-form audio user metrics - Management noted that while podcast growth in China is limited, long-form audio content is expected to complement existing services and enhance user experience [42] Question: SVIP progress and retention metrics - Management reported strong growth in SVIP membership and ARPPU, with plans to enhance the membership system and improve user satisfaction [48] Question: Contribution of Super VIP to ARPPU growth - Management indicated that the reduction in promotional activities has positively impacted ARPPU, with expectations for continued growth from the SVIP business [52] Question: Monetization strategy for non-paying subscribers - Management emphasized converting non-paying users into subscribers while leveraging advertising and merchandise sales to generate revenue from this segment [58] Question: Future drivers for gross margin improvement - Management highlighted subscriber growth, effective cost management, and strong partnerships with content creators as key drivers for future gross margin expansion [70] Question: International opportunities, especially in Southeast Asia - Management confirmed that international markets are a key part of their strategy, with ongoing investments in content and platform development in Southeast Asia [76] Question: Outlook for advertising and offline events business - Management remains optimistic about advertising revenue growth and plans to enhance the quality of offline performances to provide comprehensive musical experiences [82]

Financial Data and Key Metrics Changes - In Q1 2025, total revenues reached RMB 7.4 billion, representing a 9% year-over-year growth [19] - Online music revenues increased by 16% year-over-year to RMB 5.8 billion, driven by strong growth in music subscription and advertising revenues [20] - Music subscription revenues reached RMB 4.2 billion, a 70% increase year-over-year [20] - Gross margin improved to 44.1%, up 3.2 percentage points year-over-year [23] - Net profit was RMB 4.4 billion, with a net profit attributable to equity holders of RMB 4.3 billion [25] Business Line Data and Key Metrics Changes - The music subscription business remains the cornerstone, with significant growth in SVIP membership and reduced promotional activity contributing to revenue increases [20][27] - Advertising revenues showed strong year-over-year growth, supported by the ad-supported model and increased engagement [20][21] - Artist-related merchandise sales and offline performances also contributed to revenue growth, with successful concert hosting leading to increased revenues [21][22] Market Data and Key Metrics Changes - The company has strengthened partnerships with record labels, enhancing its music library and user engagement [5][6] - There is a growing popularity of Korean, English, and Japanese tracks among users, indicating a diversification in music consumption preferences [7] - The company has expanded its merchandise collaborations, which have shown strong sales performance [8][9] Company Strategy and Development Direction - The company aims to enhance user engagement through a diverse range of music services and content offerings, focusing on high-quality growth [4][12] - Continued investment in original content production and innovative technologies is planned to improve user experience and strengthen the ecosystem [27] - The company is committed to expanding its SVIP membership and advertising business while diversifying offerings across the music value chain [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the 2025 outlook, expecting year-over-year growth rates to accelerate and margins to expand [31] - The company is focused on encouraging more music consumption and enhancing user engagement through unique offerings [31][32] - Management highlighted the importance of long-form audio content and its complementary role in driving user engagement and subscription growth [38] Other Important Information - The company released its 2024 ESG report, detailing practices in intellectual property protection, user privacy, and fostering diverse music communities [11] - The effective tax rate for Q1 2025 was 9.2%, a decrease from 19.9% in the same period of 2024 [25] Q&A Session Summary Question: Outlook for top line profit growth for the next quarter and full year 2025 - Management expressed confidence in achieving strong results in Q1 and expects growth rates to accelerate in 2025, driven by rich service offerings and user engagement [31] Question: Growth opportunity of podcasts in China and long-form audio user metrics - Management noted that while podcast growth in China is limited, long-form audio content is expected to grow and complement the existing subscriber base [36][38] Question: SVIP progress and key KPIs - Management reported strong growth in SVIP membership and ARPPU, with plans to enhance the membership system and improve user satisfaction [40][43] Question: Contribution of Super VIP to ARPPU growth - Management indicated that the reduction in promotional activities has positively impacted ARPPU growth, with expectations for continued growth from the SVIP business [46][48] Question: Monetization strategy for nonpaying subscribers - Management emphasized converting nonpaying users into subscribers and leveraging advertising and merchandise sales to generate revenue from this segment [51][55] Question: Future drivers for gross margin improvement - Management highlighted subscriber growth and cost management as key drivers for future gross margin improvement, with expectations for continued growth [60][62] Question: International opportunities, especially in Southeast Asia - Management acknowledged the importance of international markets and plans to invest in content creation and platform development in Southeast Asia [68][71] Question: Outlook for advertising and offline events business - Management expressed a positive outlook for advertising revenue growth and plans to enhance the quality of offline performances [79][80]

Investment Rating - The report maintains a "Buy" rating for Tencent Music (TME.US) with a target price of $15.80, indicating a potential upside of 20.2% from the current price of $13.14 [1][6][11]. Core Insights - The company achieved robust performance in 2024, with total revenue of 28.4 billion RMB, a year-on-year increase of 2.3%. Net profit reached 7.11 billion RMB, up 36.2%, while adjusted net profit was 8.14 billion RMB, reflecting a growth of 30.7% [4][8]. - The integration of AI technology into the music experience is expected to drive a second growth curve for the business, enhancing user engagement and creating new commercial opportunities [5][9][10]. - The report highlights the company's strategic focus on AI technology as a key driver for enhancing its competitive edge in the digital music sector, leading to improved user experience and content ecosystem [6][11]. Financial Performance - In 2024, the online music service revenue was 20.23 billion RMB, growing by 16.1%, with subscription revenue reaching 15.23 billion RMB, a 25.9% increase. The number of paid users grew to 121 million, a 13.4% increase [8]. - The sales gross margin improved from 35.3% in 2023 to 42.3% in 2024, driven by strong growth in subscription and advertising revenues [4][8]. - The report projects continued revenue growth, with expected revenues of 31.08 billion RMB in 2025, reflecting a year-on-year growth of 9.43% [7]. Shareholder Structure - Major shareholders include Tencent with a 47.80% stake and Spotify with 4.12% [3]. Valuation Metrics - The report values the online music business at 7 times price-to-sales (PS) and the social entertainment business at 6 times price-to-earnings (PE), supporting the target price of $15.80 [6][11].

Financial Performance - Total revenues for Q4 2024 were RMB7.46 billion (US$1.02 billion), an 8.2% year-over-year increase, driven by growth in online music services[4] - Revenues from music subscriptions reached RMB4.03 billion (US$552 million), representing an 18.0% year-over-year growth, with paying users increasing by 13.4% to 121.0 million[4] - Net profit for Q4 2024 was RMB2.08 billion (US$284 million), a 47.3% year-over-year growth, while non-IFRS net profit was RMB2.40 billion (US$329 million), up 43.0%[4] - Full year 2024 total revenues increased to RMB28.40 billion (US$3.89 billion), a 2.3% year-over-year growth, with music subscription revenues growing by 25.9% to RMB15.23 billion (US$2.09 billion)[24][28] - Total operating profit for Q4 2024 was RMB2.41 billion (US$330 million), representing a 40.5% year-over-year increase[18] - For the full year of 2024, net profit was RMB7.11 billion (US$974 million), with net profit attributable to equity holders of the Company at RMB6.64 billion (US$910 million) [30] - Non-IFRS net profit for the full year of 2024 was RMB8.14 billion (US$1.12 billion), and non-IFRS net profit attributable to equity holders was RMB7.67 billion (US$1.05 billion) [30] - Basic and diluted earnings per ADS for the full year of 2024 were RMB4.31 (US$0.59) and RMB4.24 (US$0.58), respectively [31] - The profit for the three months ended December 31, 2024, increased to RMB 2,076 million, representing a 47% growth compared to RMB 1,409 million in the same period of 2023[47] - Non-IFRS net profit for the year ended December 31, 2024, reached RMB 8,136 million, up 30.5% from RMB 6,223 million in 2023[47] - Basic earnings per share for Class A and Class B ordinary shares increased to RMB 0.74 for the three months ended December 31, 2024, compared to RMB 0.51 in the same period of 2023, reflecting a 45% increase[47] Revenue Breakdown - Revenues from online music services grew by 16.1% year-over-year to RMB5.83 billion (US$799 million) in Q4 2024, driven by subscription and advertising revenue growth[16] - Revenues from social entertainment services decreased by 13.0% to RMB1.63 billion (US$223 million) in Q4 2024, primarily due to adjustments in live-streaming functions[14][28] - Online music services revenue for the year ended December 31, 2024, was RMB21.74 billion (US$2.98 billion), an increase from RMB17.33 billion in 2023 [44] Profitability and Margins - Gross margin for Q4 2024 improved to 43.6% from 38.3% in Q4 2023, attributed to strong growth in music subscription revenues and advertising services[17] - Gross profit for the year ended December 31, 2024, was RMB12.03 billion (US$1.65 billion), compared to RMB9.80 billion in 2023 [44] - Operating profit for the year ended December 31, 2024, was RMB8.71 billion (US$1.19 billion), up from RMB6.06 billion in 2023 [44] Cash and Investments - Cash and cash equivalents at the end of the year decreased slightly to RMB 13,164 million from RMB 13,567 million at the beginning of the year[54] - The company reported net cash provided by operating activities of RMB 10,275 million for the year ended December 31, 2024, a significant increase from RMB 7,337 million in 2023[54] - The company experienced a net cash used in investing activities of RMB 6,818 million for the year ended December 31, 2024, compared to RMB 1,863 million in 2023, indicating increased investment activity[54] - The company’s financial assets at fair value through other comprehensive income increased significantly to RMB 14,498 million as of December 31, 2024, from RMB 6,540 million in 2023, reflecting a 121% increase[50] Shareholder Returns - The company announced an annual cash dividend of approximately US$273 million and a new share repurchase program of up to US$1 billion[5][8] - The Company declared a cash dividend of US$0.09 per ordinary share, totaling approximately US$273 million for the fiscal year of 2024 [33] - The board of directors authorized a new Share Repurchase Program to repurchase up to US$1 billion of Class A ordinary shares over a 24-month period starting March 2025 [32] Assets and Equity - Total assets as of December 31, 2024, are RMB 90,444 million, an increase of 19.7% from RMB 75,536 million as of December 31, 2023[50] - The total equity attributable to equity holders of the company increased to RMB 67,863 million as of December 31, 2024, compared to RMB 55,907 million as of December 31, 2023, marking a 21.4% growth[51] - Investments accounted for using the equity method rose to RMB 4,669 million as of December 31, 2024, up from RMB 4,274 million in 2023[50] ESG Initiatives - The Company supported 192,000 female artists as part of its ESG initiatives, promoting diversity and inclusion in the music community [34]

Financial Performance - Total revenues for the year ended December 31, 2023, were RMB 27,752 million, a slight increase from RMB 26,770 million in 2022, representing a growth of approximately 3.6%[57] - Gross profit for 2023 was RMB 9,795 million, compared to RMB 3,747 million in 2022, indicating a significant increase of 161.5%[57] - Operating profit for 2023 reached RMB 6,059 million, a substantial rise from an operating loss of RMB 131 million in 2022[57] - Profit for the year 2023 was RMB 5,220 million, compared to a loss of RMB 302 million in 2022, marking a turnaround in profitability[57] - The company reported a profit for the year 2024 of RMB 7,109 million, up from RMB 5,220 million in 2023, representing a growth of approximately 36.3%[59] Assets and Liabilities - Total assets as of December 31, 2023, amounted to RMB 75,536 million, an increase from RMB 62,859 million in 2022, reflecting a growth of approximately 20.2%[60] - Total liabilities as of December 31, 2023, were RMB 18,334 million, compared to RMB 6,952 million in 2022, indicating a significant increase of 163.5%[60] - Investments in subsidiaries increased to RMB 51,534 million as of December 31, 2024, compared to RMB 38,375 million in 2023, reflecting a growth of 34.3%[61] Cash Flow - For the year ended December 31, 2023, the consolidated net cash inflow from operating activities was RMB 7,337 million, a slight decrease from RMB 7,481 million in 2022[63] - The net cash inflow from investing activities for 2023 was RMB 307 million, compared to a net outflow of RMB 1,446 million in 2022[63] - The net cash outflow from financing activities in 2023 was RMB 1,538 million, an improvement from RMB 3,419 million in 2022[63] - For the year ended December 31, 2024, the consolidated net cash inflow from operating activities is projected to be RMB 10,275 million, up from RMB 7,337 million in 2023[64] Regulatory Environment - The Group faces significant legal and operational risks due to regulatory authority in China, which could impact business operations and financial performance[48] - The VIE structure is essential for foreign investment exposure in China-based companies, as direct foreign investment is restricted[40] - Recent regulatory developments in China have strengthened oversight on cybersecurity and data privacy, which may affect operational compliance and data management strategies[69] - The China Securities Regulatory Commission (CSRC) implemented new filing requirements for PRC domestic companies seeking to list overseas, effective March 31, 2023[75] Legal Risks - The company faces significant competition from other online music services and emerging content forms like live streaming and user-generated videos[169] - As of December 31, 2024, there are 315 pending lawsuits related to copyright infringement against the company, with total damages sought amounting to approximately RMB198.7 million (US$27.2 million)[201] - The company may face litigation based on allegations of copyright infringement, which could require significant time and financial resources to defend against[135] Operational Challenges - The company faces risks related to user preferences and content licensing, which could adversely affect user retention and financial performance[90] - The company must navigate complex license agreements and potential copyright infringement claims, which may limit operational flexibility and financial outcomes[94] - Compliance with evolving cybersecurity and data protection laws may incur significant costs and necessitate adverse changes to business operations[99] Strategic Initiatives - The company is investing heavily in content creation and partnerships within the Tencent ecosystem to enhance user experience and meet evolving demands[207] - The company has devoted substantial efforts to monetize its content and user base, generating revenue from online music services and social entertainment, but faces challenges in increasing paying users[151] - The company is incorporating AI technology across its product offerings to enhance music content distribution and production, requiring it to stay current with industry trends[157] Economic Factors - Economic challenges in China or globally could materially impact the company's financial condition[100] - The global macro-economic environment presents challenges, including geopolitical tensions and economic sanctions that could impact the company's financial condition[237]

Financial Data and Key Metrics Changes - In Q4 2024, total revenues reached RMB 7.5 billion, an 8% year-over-year increase [21] - Online music revenues increased by 16% year-over-year to RMB 5.8 billion, driven by strong growth in music subscription revenues [22] - Net profit increased by 47% year-over-year to RMB 2.1 billion, marking the highest quarterly profit in the company's history [21][26] - Non-IFRS net profit rose by 43% year-over-year to RMB 2.4 billion [27] Business Line Data and Key Metrics Changes - Music subscription revenues in Q4 2024 reached RMB 4 billion, representing an 18% increase year-over-year [22] - The number of online music paying users was 121 million, a 13% increase year-over-year [23] - Advertising revenues achieved strong year-over-year growth, primarily due to the growth in ad-supported model revenues [23] Market Data and Key Metrics Changes - Social entertainment services and other revenues were RMB 1.6 billion, down by 13% year-over-year [24] - The gross margin for Q4 reached 43.6%, an increase of 5.3 percentage points year-over-year [24] Company Strategy and Development Direction - The company is focused on strengthening its business presence across the music value chain and enhancing user experiences through continuous product and service innovation [40] - The dual engine strategy combines rich content and platform innovation to capture emerging opportunities [4] - The company plans to invest in original content production, high-quality content, and innovative technologies globally [32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth prospects, expecting healthy growth in online music driven by an increase in paying users and ARPPU [40] - The company aims to explore new business opportunities in content ecosystems, IoT, long-form audio, and international markets [41] - Management noted that the music live shows business in China is expected to continue strong performance, with stable market size and ticket prices [57] Other Important Information - The company announced an annual dividend of $273 million and a new share repurchase program of up to $1 billion [4] - The total revenues for the full year 2024 were RMB 28.4 billion, up by 2% year-over-year [29] Q&A Session Summary Question: Guidance on 2025 growth outlook - Management highlighted strong performance in 2024 and expressed optimism for 2025, focusing on user experience and continuous innovation [40][41] Question: Balance between subscriber and ARPU growth - Management indicated confidence in maintaining growth in both subscriber numbers and ARPU, while being cautious of price sensitivity [51][52] Question: Changes in consumer sentiment towards discretionary spending - Management observed a growing demand for live concerts and music festivals, indicating a positive cycle for music content consumption [56] Question: Strategy around AI in 2025 - Management plans to leverage AI technologies to enhance user experience and improve sound quality, while managing costs effectively [60][62] Question: Sequential revenue growth for social entertainment - Management noted that new interactive features and compliance improvements contributed to recent growth in social entertainment revenue [66][70]

Financial Data and Key Metrics - The company announced its quarterly financial results before the U.S. market opened, and the earnings release is available on the IR website and via Newswire services [1] Business Line Data and Key Metrics - No specific data or metrics related to individual business lines were provided in the content Market Data and Key Metrics - No specific data or metrics related to individual markets were provided in the content Company Strategy and Industry Competition - The Executive Chairman and CEO will provide an overview of the company's strategies and business updates during the call [2] Management Commentary on Operating Environment and Future Outlook - No specific commentary on the operating environment or future outlook was provided in the content Other Important Information - The call includes forward-looking statements, and non-IFRS measures will be discussed, with explanations and reconciliations provided in the earnings release and SEC filings [3] - The call is being recorded, and participants are currently muted [4] Q&A Session Summary - No Q&A session details were provided in the content

Financial Data and Key Metrics Changes - The company reported a 33% year-over-year increase in IFRS net profit to RMB1.8 billion and a 26% increase in non-IFRS net profit to RMB2 billion [19] - Total revenues decreased by 2% year-over-year to RMB7.2 billion, primarily due to a decline in revenues from social entertainment and other services [19] - Online music revenues increased by 28% year-over-year to RMB5.4 billion, driven by strong growth in music subscription revenues and advertising revenues [19][20] Business Line Data and Key Metrics Changes - Music subscription revenues reached RMB3.7 billion, marking a 29% year-over-year increase and a 3% sequential rise [20] - The number of online paying users increased by 18% year-over-year to 117 million, with quarterly net additions of 3.5 million [20] - Revenues from social entertainment services decreased by 43% year-over-year to RMB1.7 billion [21] Market Data and Key Metrics Changes - The company experienced strong growth in advertising revenues, attributed to ad-supported advertising and promotions during the 618 mid-year shopping festival [21] - The gross margin for Q2 reached 42%, an increase of 7.7 percentage points year-over-year, driven by the expansion of the paying user base and improved monthly ARPPU [22] Company Strategy and Development Direction - The company is focused on high-quality growth in its music business, expanding SVIP membership, and improving operational efficiency [26] - The strategy includes investing in high-quality content and innovative technologies to enhance user engagement and experience [26] - The company aims to maintain a balance between subscriber growth and ARPPU expansion, with a focus on enriching member privileges [20][30] Management Comments on Operating Environment and Future Outlook - Management remains optimistic about achieving healthy revenue and profit growth in 2024, despite challenges from the macro environment [29][58] - The online music business is seen as a low-cost entertainment option, which is less affected by macroeconomic downturns [58] - The company expects advertising revenue to perform well in the coming quarters, supported by growth in ad-supported advertising and offline event sponsorships [31][59] Other Important Information - The company launched new features to enhance user experience, including improved sound quality and personalized music discovery [13][15] - The self-produced content continues to gain popularity, contributing to user conversion and engagement [10][11] Q&A Session Summary Question: Outlook for the second half of 2024 regarding top line growth and profitability trends - Management expects healthy revenue and profit growth, with both net additions and ARPPU contributing to online music growth [29] Question: Details on ARPPU growth strategies - Future ARPPU growth will be driven by the SVIP plan, which offers enhanced privileges and sound quality [34][36] Question: Membership net adds trend and long-term penetration - Management aims for steady growth in net adds while focusing on revenue and profit, with confidence in achieving long-term subscriber targets [44][47] Question: Profitability and margin trends - Management is confident in continued gross and net margin growth, supported by subscription and advertising revenue increases [48][52] Question: Impact of macro headwinds on business segments - The macro environment poses challenges, but the online music business remains resilient, with advertising and sponsorships expected to perform well [58][59] Question: Changes in the competitive landscape - The company plans to maintain its competitive position by improving content and user experience [60][62]