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    Lei Zhang

    Research Analyst at Bank of America Merrill Lynch

    Lei Zhang is an Analyst at Bank of America Merrill Lynch, specializing in equity research coverage of leading technology and internet companies in Asia, including NetEase and HUYA. Zhang is recognized for delivering timely analysis on company performance and emerging trends within the gaming and digital media sectors, as demonstrated by participation in high-profile earnings calls and direct inquiries about product launches and business forecasts. Since joining Merrill Lynch (Asia Pacific) Limited in July 2018, Zhang has established a reputation for in-depth market insights, although publicly available data on investment performance metrics such as success rates or average returns is limited. Zhang holds a representative license with the Hong Kong SFC for advising on securities, underscoring a commitment to industry standards and regulatory compliance.

    Lei Zhang's questions to NetEase (NTES) leadership

    Lei Zhang's questions to NetEase (NTES) leadership • Q1 2025

    Question

    Lei Zhang of BofA Securities inquired about the drivers behind the sustained strong performance of the game 'Identity V' and its future growth prospects, as well as any lessons learned for reviving other titles.

    Answer

    CEO William Ding, via interpreter Bill Pang, explained that 'Identity V's' success stems from six years of continuous investment, optimization, and improvement, making it a leader in both China and Japan. The operational experience from 'Identity V' is being applied to other games. Mr. Ding affirmed that NetEase will continue to invest more resources into the game to expand its asymmetric PVP player base.

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    Lei Zhang's questions to iQIYI (IQ) leadership

    Lei Zhang's questions to iQIYI (IQ) leadership • Q4 2024

    Question

    Lei Zhang of Bank of America Securities asked for an update on iQIYI's mini-drama business and the company's strategic plan for this segment in 2025.

    Answer

    CEO Yu Gong explained that the company is focusing on vertical-format mini-dramas due to user demand for fast-paced content and a market size expected to exceed the Chinese box office. He detailed the rapid expansion of their content library to over 10,000 titles, leveraging their experienced teams and industry relationships. The strategy involves using the iQIYI Lite app for free, ad-supported mini-dramas, while the main app focuses on subscription content. For 2025, the plan is to build an original mini-drama ecosystem, increase ad inventory, and invest in user growth.

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    Lei Zhang's questions to iQIYI (IQ) leadership • Q3 2024

    Question

    Lei Zhang asked about the company's investment capacity for short dramas and the anticipated impact on future content costs.

    Answer

    CEO Yu Gong stated that funding for mini-dramas will be sourced by reallocating budget from low-ROI long-form content and by 'scientifically and rationally' increasing the budget. He highlighted iQIYI's advantages, including its mature mobile apps (iQIYI and iQIYI Lite) and existing relationships with content providers, which allow for rapid and low-cost scaling. The main app will remain focused on long-form and subscriptions, while the Lite app will pivot to mini-dramas and advertising.

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    Lei Zhang's questions to Bilibili (BILI) leadership

    Lei Zhang's questions to Bilibili (BILI) leadership • Q4 2024

    Question

    Lei Zhang of Bank of America asked about the long-term operational strategy for the hit game 'San Guo: Mou Ding Tian Xia', focusing on its life cycle, future updates, and plans for overseas expansion.

    Answer

    CEO Rui Chen, interpreted by Juliet Yang, confirmed that the top priority is long-term operation, targeting a life cycle of at least five years. He expressed confidence in the game's longevity, citing the strong performance of other Bilibili titles like 'FGO' and 'Azure Lane'. The strategy involves incorporating player feedback for updates, multi-platform expansion, and a significant overseas launch planned for the second half of the year, starting with a traditional Chinese version tailored for international players.

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    Lei Zhang's questions to Bilibili (BILI) leadership • Q3 2024

    Question

    Lei Zhang inquired about Bilibili's high-level strategic focus on user growth and commercialization after achieving its first profitable quarter, and how it plans to strengthen its position in the video industry.

    Answer

    CEO Rui Chen, with interpretation by Juliet Yang, explained that profitability is a natural outcome of their evolving business model. He stated the future focus remains on community and commercial growth, with a sharpened concentration on high-margin businesses like games and advertising. Chen emphasized that commercialization creates a positive flywheel, supporting the content ecosystem, noting that 2.7 million creators earned income on the platform in the first nine months of 2024 through diverse channels beyond just ads.

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    Lei Zhang's questions to DouYu International Holdings (DOYU) leadership

    Lei Zhang's questions to DouYu International Holdings (DOYU) leadership • Q3 2024

    Question

    Lei Zhang of BofA Securities inquired about the future growth prospects for DouYu's live streaming business and any associated strategic changes.

    Answer

    Hao Cao, Vice President of Finance, explained that due to fierce market competition and a soft macro environment, the strategy has shifted from broad user acquisition to retaining core, high-ROI users. This involves enhancing premium content offerings, focusing on ROI-positive marketing, and diversifying revenue streams through new ventures like game prop monetization in partnership with game developers.

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    Lei Zhang's questions to DouYu International Holdings (DOYU) leadership • Q2 2024

    Question

    Lei Zhang asked for the drivers behind the year-over-year decline in second-quarter gross margin and the outlook for the full-year gross margin and overall profitability.

    Answer

    Hao Cao, Vice President of Finance, explained the gross margin decline was primarily due to falling live streaming revenue, which outpaced reductions in relatively fixed costs like copyright fees and base streamer compensation. Cao stated that achieving net-level breakeven for 2024 will be challenging, also citing lower expected interest income following dividend distributions. The company will focus on cost controls and revenue structure optimization.

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    Lei Zhang's questions to DouYu International Holdings (DOYU) leadership • Q1 2024

    Question

    Lei Zhang of Bank of America Merrill Lynch inquired about the net loss in the first quarter, the company's full-year margin outlook, and its strategy for cash utilization.

    Answer

    Hao Cao, Vice President of Finance, responded that DouYu's primary focus is on long-term sustainable growth amid macroeconomic challenges. He anticipates some deleverage on profit levels due to a shrinking revenue base but emphasized the company's strong financial position with RMB 6.76 billion in cash. Mr. Cao stated that funds will be prudently allocated to new business ventures and share repurchases to bolster market confidence and support long-term growth.

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    Lei Zhang's questions to HUYA (HUYA) leadership

    Lei Zhang's questions to HUYA (HUYA) leadership • Q3 2024

    Question

    Lei Zhang questioned the drivers behind the Q3 margin changes and asked for the company's outlook on margin trends going forward.

    Answer

    Acting Co-CEO and CFO Lei Peng stated that the Q3 gross margin was 13.2%, down slightly as the decline in live streaming revenue outpaced cost savings from content optimization. However, total operating expenses fell 20.9% YoY, keeping performance stable with a non-GAAP net profit of RMB 78 million. Looking ahead, margins will be influenced by revenue scale and cost structure adjustments. A new League of Legends licensing deal is expected to optimize costs in 2025, though Q4 costs will be higher due to a major event. Management anticipates a 'noticeable improvement' in Q4 gross margin year-over-year.

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    Lei Zhang's questions to Tencent Music Entertainment (TME) leadership

    Lei Zhang's questions to Tencent Music Entertainment (TME) leadership • Q3 2024

    Question

    Lei Zhang from Bank of America questioned why the growth to 10 million SVIP members had not yet resulted in a more significant uplift to overall ARPPU and asked when a stronger impact could be expected.

    Answer

    An executive explained that reaching 10 million SVIPs was a gradual, year-long process, and the impact on ARPPU is similarly cumulative. A more pronounced effect on overall ARPPU is expected when the SVIP base reaches a larger scale, such as 20 to 30 million members. The executive confirmed that the ARPPU of the current SVIP cohort is already higher than that of basic subscribers.

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