Yang Liu

Yang Liu of Morgan Stanley inquired about the latest developments regarding the State Administration for Market Regulation (SAMR) investigation and its potential impact on Trip.com Group's business in 2026 and beyond.

Answer

CEO Jane Sun stated that Trip.com Group is fully cooperating with SAMR, engaging constructively and transparently, and will provide updates as required. She reiterated the company's focus on inbound tourism, social responsibility, and AI innovations to drive long-term value.

Yang Liu asked for an update on the recent SAMR investigation and its potential impact on Trip.com Group's business in 2026 and the longer term.

Answer

CEO Jane Sun stated that Trip.com Group is actively cooperating with the State Administration for Market Regulation, engaging constructively and transparently. She reiterated the company's commitment to fostering a transparent and sustainable environment, focusing investments on inbound tourism, social responsibility initiatives, and AI innovations to drive long-term value.

Yang Liu requested insights into recent consumer sentiment and Trip.com Group's early thoughts for the coming year, 2026.

Answer

Jane Sun, Chief Executive Officer, highlighted robust leisure travel, strong momentum in long-haul trips (outbound hotel and flights up over 30%), and stable per-capita spending. For 2026, she emphasized enhancing products and services, accelerating international growth (especially in Asia-Pacific), and capturing domestic demand, including inbound travel and the silver and young traveler segments, expressing a very positive outlook.

Yang Liu from Morgan Stanley sought insights into recent consumer sentiment and Trip.com Group's early thoughts for the coming year, 2026.

Answer

CEO Jane Sun affirmed the travel industry's strength and growing desire for exploration. She highlighted robust leisure travel, strong momentum in long-haul trips (outbound hotel and flights up over 30%, driven by Europe), and domestic travelers seeking immersive experiences. Per-capita spending remained in line year-over-year, and business travel was stable with increasing average spending. For 2026, the focus is on enhancing products and services, global investment (especially Asia-Pacific), capturing domestic demand, and leveraging inbound, silver generation, and young traveler segments.

Yang Liu of Morgan Stanley asked about the potential business impact of a competitor, Yuni Trip, launching a new feature that supports direct airline sales.

Answer

CFO Cindy Wang responded by emphasizing the large size of the travel market, which has always seen new entrants. She stated that Trip.com's strategy remains focused on providing excellent service and comprehensive products, such as its global SOS program and 24/7 support, to build customer confidence and loyalty, rather than engaging in pure price competition.

Yang Liu from Morgan Stanley asked for an update on the company's performance during the recent Labor Day holiday and for the second quarter to date.

Answer

CFO Xiaofan Wang reported strong Labor Day performance, with domestic hotel bookings up over 20% and cross-border bookings up around 30% YoY. She noted that inbound bookings surged by approximately 150% and that both domestic air and hotel prices showed significant improvement from Q1, indicating resilient leisure travel demand.

Yang Liu from Morgan Stanley questioned the expected trend for the operating margin in 2025 and beyond, noting it reached a decade-high in 2024.

Answer

CFO Xiaofan Wang stated that the company does not set specific margin targets, viewing margin as an outcome of business mix and operational efficiency. She noted that near-term margins would be impacted by strategic investments in overseas expansion but that AI-driven solutions would enhance long-term efficiency. In the long run, she sees no structural limitations to margins being comparable to international peers.

Yang Liu with CICC asked about NetEase's significant progress in game globalization, citing successes like Naraka: Bladepoint, Marvel Rivals, and Where Winds Meet. He questioned whether NetEase has developed a replicable path to success for overseas expansion, how the company plans its product pipeline for high-potential markets like the US and Europe, and what its global team structure and future talent strategy entail.

Answer

CEO William Ding and VP of Corporate Development Bill Pang acknowledged the difficulty but success of their overseas expansion, starting with Knives Out in Japan in 2018, followed by Naraka: Bladepoint, Marvel Rivals, and Where Winds Meet in Western markets. They believe NetEase, with its strong R&D capabilities, has grasped the core elements for success in these markets and expects more titles to succeed globally. Regarding talent, they emphasized China's deep talent pool in game development and NetEase's commitment to cultivating top-tier creative minds for global premium games.

Yang Liu (CICC) asked if NetEase has developed a replicable path to success for overseas expansion, given recent successes like "Naraka: Bladepoint," "Marvel Rivals," and "Where Winds Meet." Liu also inquired about the company's product pipeline strategy for high-potential markets (U.S., Europe) and its global team structure and future talent strategy.

Answer

CEO William Ding and VP of Corporate Development Bill Pang acknowledged that NetEase's global expansion, starting with "Knives Out" in Japan in 2018, has led to successful titles in Western markets, reflecting significant R&D capabilities and a growing understanding of core success elements. They believe NetEase can produce more successful global titles. Regarding talent, they emphasized China's deep talent pool and NetEase's commitment to cultivating top-tier creative minds to deliver premium global games.

Yang Liu of Morgan Stanley inquired about the monetization performance of 'Where Wings Meet' and the drivers behind the recent grossing rebound for 'Once Human', including its potential to become an evergreen title and its user and revenue split between China and overseas markets.

Answer

Bill Pang, VP of Corporate Development, stated that 'Where Wings Meet' exceeded initial expectations with a stable, cosmetic-only monetization model. He attributed the rebound of 'Once Human' to a significant 'version 2.0' update and a new PVP spin-off, noting its long-term potential. Pang also detailed that 'Once Human' has a 50/50 user split between China and the rest of the world, with a 2-to-3 revenue distribution, respectively.

Yang Liu from Morgan Stanley asked about the improving feedback and monetization for 'Where Winds Meet,' seeking to understand what strategies have been effective and what the next operational steps are for the title.

Answer

CEO William Ding, via interpreter Bill Pang, described 'Where Winds Meet' as a very important game that took five years to develop. He stated that NetEase will continue to invest in polishing the game's presentation and gameplay for the long term, aiming for it to become an evergreen title over the next 5-10 years. The success has provided valuable experience that will be applied to other products.

Yang Liu of Morgan Stanley asked about the game 'Where Winds Meet', focusing on its future monetization strategy, potential areas for improvement like cosmetics and multiplayer gameplay, and the timeline for its overseas launch.

Answer

Executive Bill Pang, translating for CEO William Ding, explained that 'Where Winds Meet' has shown solid performance with robust metrics. The monetization strategy will continue to center on cosmetics, which has been well-received. Future plans involve enriching the open world with new content, maps, and costumes, while actively collecting player feedback. The overseas version is currently in development and is expected to launch in 2025.

Yang Liu from Morgan Stanley inquired about Tuya's business outlook for the fourth quarter of 2025, considering it a peak season, and sought an early perspective on customer demand for 2026, especially in light of settling international trade deals.

Answer

Alex Yang, Director, Co-founder, COO, and CFO of Tuya, indicated a soft demand outlook for Q4 2025 due to global macroeconomic uncertainties, expecting a subdued promotion season. For 2026, he expressed a positive outlook, emphasizing that AI features and smart home portfolios are becoming an inevitable trend, boosting the IoT experience and making smart devices more accessible. He concluded that while 2025 faces short-term pressures, the long-term outlook remains very positive.

Yang Liu asked about Tuya's business outlook for the fourth quarter of 2025, considering it's a peak season, and provided an early look at customer demand expectations for 2026, especially in light of recent international trade deal settlements.

Answer

Alex Yang, Co-founder and CFO, indicated that Q4 2025 demand is expected to be soft due to global macroeconomic uncertainties, with regular promotion seasons being softer than the previous year. However, he noted a positive outlook for 2026, driven by the increasing inevitability of AI features and smart home portfolios, which are attracting more consumers and major brands. Yang also highlighted AI's role as a booster for the IoT experience, making devices more user-friendly and lowering the entry barrier for new users, contributing to a positive long-term outlook despite short-term pressures.

Yang Liu from Morgan Stanley inquired about Tuya's growth outlook for the third quarter and the remainder of the year, considering the uncertain global trade environment, and asked for an update on the impact of foreign exchange (FX) on the company's profit and loss statement.

Answer

Co-founder, COO, and CFO Alex Yang responded that tariff uncertainty is expected to continue, putting pressure on consumer electronics and leading to conservative ordering from retailers for upcoming promotional seasons. He anticipates continued pressure in Q3 but expects improvement in Q4. Regarding FX, Mr. Yang stated that while there is some pressure, the situation is stable and under control.

Yang Liu of Morgan Stanley inquired about the types of AIoT hardware experiencing strong shipment volumes and asked for observations on customer behavior over the past two months in light of significant tariff volatility.

Answer

CFO Yi Yang identified two key areas showing strong interest in AI: audio/video interactive experiences like smart bird feeders and kids' toys using LLMs, and data-driven decision-making systems like their CONOW energy management solution. Regarding tariffs, Yang explained that customers have become more conservative and hesitant, awaiting certainty. He noted that while Tuya is indirectly affected, its diversified global manufacturing footprint and focus on components and software provide some insulation. The primary concern is the potential macro impact on consumer demand in the U.S. and beyond.

Yang Liu questioned the outlook for Tuya's revenue structure across its three business lines and the potential impact on blended gross margin. She also asked for management's view on the competitive landscape for AI in the IoT solutions space.

Answer

Co-Founder and CFO Alex Young (Yi Yang) projected that PaaS will provide a stable growth base, SaaS will be a long-term journey, and the Smart Solutions segment may grow fastest. This mix shift could cause a slight, reasonable decrease in the overall gross margin over the long term. Regarding competition, Young emphasized that the AI device market is in a very early, active stage with many new players. He stated Tuya's unique value is providing a toolkit that lowers the barrier to entry, allowing developers to quickly test and launch new AI-powered product ideas.

Yang Liu inquired about Tuya's future demand outlook, asking if the nearly 30% growth seen in the first half of 2024 could be sustained in the second half, considering the high comparison base from the previous year.

Answer

Incoming CFO Alex Yang responded that while the macroeconomic environment has stabilized, providing a positive backdrop, the high base from Q3 2023 makes specific forecasts challenging. However, he expressed optimism for continued year-over-year growth in the core business for the second half, citing Tuya's resilient 'cubic model' which diversifies across customer needs, industries, and geographies, with particularly strong growth in Latin America and Southeast Asia.

Yang Liu asked about the inflection point in the China market and GDS's aggressive strategy, including specific locations and project types. Additionally, Liu inquired about the new overall investment return profile with the recently established CREET platform.

Answer

William Huang, GDS Founder, Chairman, and CEO, explained that the aggressive approach is driven by strong market demand, major customer AI investments, and domestic chip advancements. GDS plans to acquire more powered land in cost-effective locations near Tier 1 cities. Dan Newman, GDS CFO, detailed the CREET's impact, projecting an 11-12% cash-on-cash yield on new investments and a low to mid-teens IRR (levered IRR in the 20s) over a 5-6 year cycle. William Huang added that stable pricing and low development costs make this an opportune time for investment.

Yang Liu asked about the inflection point in the China market, GDS's strategy to become more aggressive (including specific locations and project types), and the new overall investment return profile with the CREET scheme.

Answer

William Huang (Founder, Chairman and CEO) explained that the aggressive approach is driven by strong market demand, customer AI investments, and domestic chip development, focusing on acquiring more powered land near Tier 1 cities. Dan Newman (CFO) detailed the CREET's impact, noting 11-12% cash-on-cash yield on new investments and a low to mid-teens levered IRR over a 5-6 year cycle. William Huang added that stable pricing and low development costs make it an opportune time to invest.

Yang Liu of Morgan Stanley inquired about GDS's future asset monetization strategy in China following the C-REIT IPO, asking if the company would target a 5x net debt to EBITDA ratio or pursue a more aggressive growth model. Liu also asked for an updated growth target for the Dayone international business.

Answer

CFO Daniel Newman explained that asset monetization is highly accretive and supports a new growth phase, and while the company is approaching its 5x leverage target, it won't be overly aggressive in deleveraging if attractive investment opportunities arise. CEO William Huang added that for Dayone, the internal KPI is to add at least 500 megawatts of new commitments annually, supported by its expanding multi-region footprint.

Yang Liu from Morgan Stanley inquired about the current demand from Chinese hyperscalers amid AI chip supply concerns and questioned the stability of GDS's financial guidance after the ABS deconsolidation.

Answer

CEO William Huang stated that demand remains strong, particularly for AI inferencing in Tier 1 markets, which is less reliant on GPUs. He expressed confidence in selling the 900 MW capacity within four years and noted domestic GPUs are expected to catch up. CFO Dan Newman clarified that the guidance had already factored in the ABS deconsolidation, which reduced the full-year EBITDA growth forecast from a potential 11% to the guided 8.5%.

Yang Liu inquired about the company's plans and timeline for the DayOne IPO and followed up on the progress of the C-REIT application, asking about its current status and expected timing.

Answer

CEO William Huang stated that the DayOne IPO plan is now more visible, with a target to list the company within 18 months. Regarding the C-REIT, Huang confirmed significant progress, suggesting it is moving 4 to 6 months ahead of the original schedule which targeted year-end, but noted he could not disclose specific details until permitted.

Yang Liu inquired about GDS's China REIT plan, asking for details on timing, valuation, investor types, and regulatory hurdles. He also followed up on whether the REIT would be public or private, its potential for debt reduction, and the IRR trend for new international business orders.

Answer

CFO Dan Newman detailed the REIT plan, explaining it will be a publicly listed vehicle seeded with a stabilized asset, targeting a ~RMB 2 billion offering that could deconsolidate ~RMB 1 billion in debt. He noted strong interest from Chinese financial institutions and expects an accretive valuation. For international orders, he confirmed the development yield remains consistent in the low-teens, backed by high-quality, long-term contracts.

Yang Liu asked about the business outlook for the fourth quarter of 2025 and the full year 2026, seeking insights into expected growth drivers and performance across subscription and non-subscription segments.

Answer

Executive Chairman Cussion Kar Shun Pang outlined a strong Q4 2025 outlook driven by online music, triple-digit growth in live concerts, and fan-based economy. For 2026, he anticipates sustained healthy growth in music subscriptions (albeit slower due to a high base) and faster growth in non-subscription businesses, emphasizing the dual-engine strategy.

Yang Liu asked about Tencent Music Entertainment's business outlook for Q4 2025 and the full year 2026, specifically inquiring about growth drivers for both subscription and non-subscription segments.

Answer

Executive Chairman Cussion Kar Shun Pang stated confidence in strong Q4 2025 performance, driven by multi-pronged membership offerings, steady ARPPU and paying user growth, and healthy user retention. For non-subscription, he highlighted diversified ad formats, triple-digit growth in live concerts, and expanded fan-based economy initiatives. For 2026, he projected sustained healthy growth in music subscriptions (albeit slower due to a high base) and faster growth in non-subscription businesses, emphasizing the dual-engine strategy.

Yang Liu from Morgan Stanley asked about the long-term revenue potential of 'other music revenue' like concerts and merchandise, and its overall impact on gross margin.

Answer

Management, through a moderator, confirmed that offline events and the fan economy are key strategic directions. They acknowledged these businesses have lower gross margins and seasonal fluctuations but stated their current revenue contribution is small, thus having a limited impact on the company's overall gross margin. They remain confident in the rising trend of the total gross margin, driven by high-margin subscription and advertising growth.

Yang Liu from Morgan Stanley questioned the long-term outlook for 'other music revenue,' including concerts and merchandise, asking about its potential share of total revenue and its impact on gross margin.

Answer

Management confirmed that offline concerts and the fan economy are important strategic directions but acknowledged their revenue can fluctuate seasonally and their gross margins are relatively low. However, because their revenue contribution is currently small compared to online music, the impact on the company's overall gross margin is limited. They remain confident in the rising trend of the total gross margin, supported by high-margin subscriptions and advertising. CEO Ross Liang also mentioned a new SVIP annual merchandise card to improve profitability.

Yang Liu from Morgan Stanley requested a breakdown of the drivers behind the strong ARPPU growth, specifically the respective contributions from the Super VIP (SVIP) program versus reduced promotional activities.

Answer

An executive declined to provide a specific breakdown but confirmed that both factors contributed. They noted that TME optimized operations and reduced discounts in Q1, which boosted ARPPU. They expect the SVIP program to become an even larger driver of ARPPU growth going forward as they continue to refine marketing strategies for basic members.

Yang Liu from Morgan Stanley asked about the future trend for per-kilowatt rental pricing over the next one to two years, questioning if a price hike is likely given strong demand and potential supply shortages. He also inquired about unit CapEx, specifically whether upstream supply constraints for components like diesel generators could lead to price increases and pressure costs.

Answer

An executive responded that VNET's pricing is market-driven and remains stable, positioned to meet market demand. On the cost side, he acknowledged that while the supply of traditional imported equipment is tight, clients are increasingly accepting of 'Made in China' alternatives, which can be slightly cheaper. He added that VNET's large-scale project designs also create opportunities for cost optimization, leading to a slightly lower unit CapEx overall. The combination of stable-to-rising revenue and lower costs is expected to improve project returns.

Yang Liu questioned the performance and future outlook for the hit game 'San Guo: Mou Ding Tian Xia', as well as the company's user acquisition strategy for the title and its overall future game pipeline.

Answer

CEO Rui Chen, with interpretation by Juliet Yang, described 'San Guo' as one of China's best-performing games this year, emphasizing a focus on its long-term (5-10 year) operation through continuous updates based on user feedback. The top priority is optimizing this title and preparing for an international launch. Chen also noted the success of 'San Guo' validates their strategy of reinventing games for young generations, which they plan to apply to new genres, and highlighted the successful global launch of another ACG title.