Ritchie Sun

Ritchie Sun with HSBC asked two questions. First, he inquired about the feedback from the January closed test for Neverness to Everness (无限大), its estimated launch timeline, and plans for a simultaneous global launch across different markets and platforms. Second, he asked about NetEase's strategy for entering the auto chess market, given two titles in testing and one licensed, and how NetEase plans to differentiate its products against experienced competitors in this genre.

Answer

EVP Hu Zhaoxuan stated that Neverness to Everness's January closed test data and player feedback met expectations, proving the product direction is innovative and attractive. The product is being refined for higher completion and richer content, targeting a simultaneous global launch across PC, mobile, and console as scheduled. CEO William Ding explained that for auto chess, NetEase aims for thematic differentiation and gameplay enhancements within the mature genre, specifically by using Chinese demon and ghost culture to create a unique narrative and aesthetic, leveraging NetEase's high standards to build a high-quality auto chess game for domestic players.

Ritchie Sun (HSBC) asked about the testing feedback and launch timeline for an unnamed game tested in January, including plans for different markets/times. Sun also questioned the rationale and differentiation strategy for NetEase entering the auto chess genre, given strong existing competitors, and the strategic thinking behind launching two auto chess titles.

Answer

EVP Hu Zhipeng and VP of Corporate Development Bill Pang stated that the January test for the unnamed game met expectations regarding retention and content feedback, with a simultaneous global launch across PC, mobile, and console planned after further refinement. CEO William Ding and VP of Corporate Development Bill Pang explained that NetEase aims for elevation and differentiation in the mature auto chess category by leveraging Chinese demon and ghost culture for uniqueness, strong narrative tension, and aesthetic potential. They aim to build high-quality auto chess games for domestic players, utilizing their proven development capabilities.

Ritchie Sun with HSBC inquired about the reasons behind the volatility in Identity V's growth and daily active users (DAU) and the strategy to improve its performance. He also asked about the performance metrics of World of Warcraft and Hearthstone in China compared to a year ago, plans for sustainable growth, and the monetization potential of Diablo IV given increased ARPG competition.

Answer

William Ding, CEO of NetEase, acknowledged competitive influences on Identity V during summer holidays, noting an easing impact and historical highs in September. He outlined plans for new content and marketing campaigns for the Chinese New Year cycle, including diversified game modes. For Blizzard titles, Ding stated that World of Warcraft's performance was expected to decline post-launch, while Hearthstone maintained steady updates. He highlighted the improved performance of both games compared to their previous operational closure and the collaborative effort on the Titan Reforged server. Ding expressed confidence in Diablo IV's unique quality and business plans to secure market share, also noting StarCraft II's record-high user engagement.

Ritchie Sun inquired about the reasons behind the recent volatility in Identity V's revenue and DAU, along with strategies for improvement. He also asked about the current performance metrics of World of Warcraft and Hearthstone one year after their return to China, plans for sustainable growth, and the monetization potential of Diablo IV amidst intense ARPG competition.

Answer

William Ding, CEO, NetEase, explained that Identity V experienced some competitive impact during summer holidays, but metrics reached historical highs in September post-back-to-school, with Q4 focusing on Chinese New Year preparations and diversified gameplay. Bill Pang, VP of Corporate Development, NetEase, added that World of Warcraft's performance decline is expected as its current expansion ends, while Hearthstone maintained its update cadence. Both games, with new operational strategies, perform higher than previous official server data, with deeper collaboration (e.g., Titan Reforged server) planned for sustained competitiveness. He stated Diablo IV has unique quality and new business plans to secure its market share, and StarCraft II achieved record-high user engagement.

Ritchie Sun from HSBC asked for an evaluation of 'Marvel Rivals' performance and strategy following its Season 3 launch, and whether it has peaked. He also requested details on 'Sea of Venomance', including feedback from its first test, its planned monetization model, and its market potential.

Answer

Bill Pang, VP of Corporate Development, responded that 'Marvel Rivals' has seen an upward and stabilized trend in both DAU and revenue since its Season 3 launch, indicating the seasonal content strategy is effective. Regarding 'Sea of Venomance', he described it as a very important product slated for a 2026 launch and stated that more details would be shared closer to the release date.

Ritchie Sun of HSBC questioned the performance of 'Once Human,' noting its strong download rank but conservative monetization. He asked for management's assessment of its potential, competitive differentiation, and future commercialization plans.

Answer

CEO William Ding, via interpreter Bill Pang, explained that 'Once Human' is a cross-play game, and many top players choose to make payments on the PC client, which impacts its mobile grossing chart rank. He noted that after the mobile launch, PC concurrent users increased 90% and payments grew 500%. Future plans include adding new game modes and exploring a private server ecosystem to satisfy player demand.

Ritchie Sun of HSBC inquired about the market potential of 'Marvel Rivals' compared to other PVP shooters and which metrics to monitor for its progress. He also asked about the factors behind the better-than-expected relaunch of Blizzard's 'World of Warcraft' and 'Hearthstone' and the expected return date for 'Overwatch'.

Answer

Bill Pang, an executive, positioned 'Marvel Rivals' as a next-generation shooter with unique gameplay, citing excellent beta test data and a high ranking on Steam's wishlist. Regarding the Blizzard titles, Pang attributed the success to a multifaceted strategy involving cross-branding collaborations, innovative social media marketing, and a deep, collaborative partnership with Blizzard. He expressed confidence in long-term performance due to high player engagement. He confirmed 'Overwatch' would be the next Blizzard game to launch in China but did not provide a specific timeline.

Ritchie Sun inquired about the main growth drivers for Full Truck Alliance's freight listing service revenue, which reached RMB 247 million (up 10.6% year-over-year) in Q3 2025, and the outlook for future user payment conversion trends.

Answer

Simon Chai, Chief Financing and Investment Officer, explained that revenue growth was driven by an increase in paying users, particularly from the 288 Membership Program, which significantly boosted membership conversion. He noted a structural shift with robust growth in 288 memberships and steady growth in 688 memberships, while high-frequency 1688 tier shippers declined. He added that approximately 20% of 288 members upgrade to the 688 tier, and the 12-month rolling retention rate for shipper members remained stable at around 80%.

Ritchie Sun from HSBC asked about the main growth drivers for Freight Listing revenue, which reached RMB 247 million (up 10.6% year-over-year) in Q3 2025, and the outlook for user payment conversion trends.

Answer

Simon Chai, Chief Financing and Investment Officer, attributed growth to an increase in paying users and optimization of the membership structure, particularly the robust growth of the RMB 288 membership program (up over 300% year-over-year). He noted a structural shift with declining high-frequency shippers in the RMB 1,688 tier, reflecting improved matching efficiency. User conversion data showed about 20% of RMB 288 members upgraded to RMB 688, and the 12-month rolling retention rate for shipper members remained steady at around 80%.

Ritchie Sun of HSBC asked for an update on the performance and key operational initiatives for the entrusted shipment business during the second quarter.

Answer

Simon Chong Cai, Chief Financing & Investment Officer, explained that the business was strategically reshuffled to focus exclusively on full truckload transactions, discontinuing the less-than-truckload carpooling service. This move aligns the service with a premium, high-reliability brand position. While causing a short-term slowdown in volume, this strategy, combined with a price consistency mechanism, has increased trucker engagement and is expected to build a stronger competitive advantage and a higher-quality ecosystem in the long term.

Ritchie Sun of HSBC asked about the main current applications of Artificial Intelligence (AI) on the platform's product functionalities and the company's future plans for AI development.

Answer

Chief Financing and Investment Officer Chong Cai stated that AI is primarily focused on intelligent dispatching via its 'smart truck finder,' which helps shippers communicate with truckers 24/7 and recommends suitable options. Future plans include increasing AI investment to enhance order posting, customer service, and route planning.

Ritchie Sun from HSBC inquired about the progress and second-half outlook for HUYA's game-related services business.

Answer

Margaret Shi, Head of Capital Markets, detailed the expansion to over 300 jointly distributed games and noted a 90% year-over-year increase in gross billings from in-game accessories. She highlighted that this segment is a key growth driver, with the company also strategically entering game publishing, citing the successful pilot for 'Goddess of Victory: Nikke' as an example of their content-led launch strategy.

Ritchie Sun from HSBC asked for the company's revenue outlook for the upcoming quarter and the full year, and also questioned how management plans to address geopolitical risks, such as potential delisting from U.S. exchanges.

Answer

Junhong Huang, Acting Co-CEO and SVP, responded that total revenue has likely bottomed out. He expects live streaming revenue to stabilize while game-related services and advertising achieve fast year-over-year growth, leading to overall revenue growth for the year. Regarding geopolitical risks, Mr. Huang stated that HUYA continuously monitors regulations and is prudently assessing potential risks and solutions, including evaluating opportunities in other capital markets, while remaining committed to protecting investor interests.

Ritchie Sun of HSBC inquired about Huya's strategy regarding Artificial Intelligence, its application on the platform, and its potential to drive future growth.

Answer

Junhong Huang, Acting Co-CEO and SVP, detailed Huya's 'AI plus live streaming' strategy. He highlighted the recent launch of an AI assistant in the app and plans for an AI-powered streamer assistant to help creators with scripts and viewer interaction. The company is also developing stylized AI virtual streamers for event commentary. Huang stated that the goal is to leverage AI throughout the content lifecycle to enhance user experience, improve creator efficiency, and propel the industry towards a technology-driven future, creating long-term value.

Ritchie Sun from HSBC asked for an update on the progress of the New Energy Vehicle (NEV) business, including its franchise stores, and inquired about the development of Autohome's data products.

Answer

Management reported that its network of new retail stores has surpassed 200 locations. These stores are being enhanced with technologies like AI-assisted test drives and VR experiences to reshape the consumer journey. For data products, Autohome has launched AI smart assistants for new and used cars and a suite of five AI-powered B2B products for OEMs, covering marketing, customer acquisition, and retail. Future plans involve leveraging its extensive data to build a deeper knowledge base and enhance its large language model capabilities.

Ritchie Sun asked about the potential impact of ongoing trade tensions on the Chinese car market and on Autohome's business specifically.

Answer

CFO Yan Zeng responded that while trade tensions could cause price fluctuations for imported U.S. auto brands, the overall impact on the Chinese auto market is expected to be limited due to the small market share of these vehicles. Consequently, she stated that the direct impact on Autohome's domestic-focused business is very limited.

Ritchie Sun of HSBC inquired about the company's perspective on further increasing its dividend payout ratio or other forms of shareholder returns.

Answer

CEO Song Yang highlighted Autohome's commitment to shareholder returns, pointing to the dividend growth from RMB 500 million in 2022 to RMB 1.5 billion in 2024. He reiterated the Board's promise to pay out no less than RMB 1.5 billion annually for the next three years. Additionally, he mentioned the active share buyback program, with approximately USD 88.5 million of the USD 200 million plan already executed, as another key method for returning value to shareholders.

Ritchie Sun from HSBC asked for management's outlook on the 2025 used car market, the strategy for its TTP platform, and an update on Autohome's shareholder return progress and future plans.

Answer

CEO Tao Wu explained that the new car price war has created a sluggish used car market, with reluctant buyers and squeezed dealer profits, leading to slow trading volume growth. He stated that for Autohome's TTP platform, the strategic focus will shift from its traditional C2B strength to capturing more opportunities in the B2B market. Regarding shareholder returns, Mr. Wu highlighted a recently announced RMB 1 billion dividend, bringing the total planned return to RMB 1.5 billion, alongside a USD 200 million share buyback program, affirming the company's commitment to maximizing shareholder value.

Ritchie Sun of HSBC inquired about Douyu's long-term development strategy following recent strategic adjustments and two significant dividend payouts.

Answer

Mingming Su, Chief Strategy Officer, clarified that the strategy focuses on reallocating resources from inefficient initiatives to high-value segments to strengthen core content advantages and alleviate margin pressure. He emphasized that this is not a contraction but a move toward stable, healthy growth. Su highlighted priorities for 2025, including improving margins by reducing content costs, enhancing the revenue mix by growing innovative businesses, and continuing to prioritize shareholder returns through programs like the recent $620 million in buybacks and special dividends.

Ritchie Sun of HSBC asked for clarification on DouYu's long-term development strategy, considering the recent strategic adjustments and two large special dividend payouts.

Answer

Chief Strategy Officer Mingming Su explained that the strategy is a reallocation of resources from inefficient initiatives to high-value segments to improve ROI and alleviate margin pressure. He emphasized that the shareholder returns, including a $20M buyback and $600M in special dividends, were based on surplus cash. The long-term goal is to achieve stable, healthy growth by improving margins, enhancing the revenue mix with innovative businesses, and building a healthy ecosystem.

Ritchie Sun from HSBC asked for a detailed elaboration on the company's strategy to optimize its cost structure and streamer operations, including specific measures, goals, and achievements.

Answer

An Unknown Executive detailed a multi-pronged approach to cost optimization. This includes refining copyright cost control through selective purchasing and negotiation, optimizing self-produced content via partnerships, and restructuring streamer compensation. The new streamer framework emphasizes ROI, linking pay to content quality and commercialization capabilities, and involves renegotiating contracts to favor performance-based incentives over high base salaries.

Ritchie Sun inquired about management's perspective on the current macroeconomic challenges and their impact on DouYu's business fundamentals and financial performance.

Answer

Hao Cao, Vice President of Finance, acknowledged two primary challenges: intense market competition from short-video platforms affecting MAUs, and macroeconomic headwinds reducing consumer spending on live streaming. Cao emphasized that core user metrics like viewing hours remain stable and the company is responding by focusing on this user base, diversifying revenue through gaming services, and controlling costs.

Ritchie Sun of HSBC requested an update on the progress and effectiveness of cross-platform content collaborations and the company's expectations for these initiatives going forward.

Answer

An executive stated that cross-platform content sharing is a key trend. In Q1, DouYu rolled out jointly-produced events and deepened its partnership with Taobao for content like the Valorant Challenges and e-commerce initiatives. The executive noted these collaborations, while currently small-scale, have proven effective in increasing traffic and user engagement across participating platforms and are expected to catalyze the healthy advancement of the industry.