FY25Q1 Performance Meeting: The company will still aim to achieve an EBITDA of 2%-3% of GMV.

25%Showing strong performance, this is a continuation of the strong growth momentum since last year. In 2024, "Free Fire" and Garena as a whole have shown excellent performance, with further acceleration in growth in the first quarter of this year, which is a very positive signal. "Free Fire" will continue to be a long-term focus. Looking at quarterly fluctuations, due to seasonal factors, the first quarter has historically performed well in most years, with major holidays such as Chinese New Year falling in this quarter, and this year Ramadan also mainly in the first quarter. In addition, the collaboration with the "Naruto" IP in the first quarter was very successful and made a significant contribution to performance, but such collaborations may not happen every quarter, so some fluctuations are expected. The management currently cannot provide guidance on full-year revenue growth, but will consider providing guidance once there is higher visibility in the future.A: Shopee's key factors for success in Brazil include having a leading pricing advantage in the market, ensuring that users on the platform always get the best prices, which is popular among the core mass user group; and making significant efforts in infrastructure, especially with SPX logistics, which has not only reduced costs but also significantly shortened delivery times. For example, in the first quarter of 2025 compared to last year, delivery times have been shortened by 2-3 days, with same-day delivery services in So Paulo, helping to better penetrate urban markets. In addition, they have also provided procurement services for some sellers, receiving good feedback from sellers. Considering that the e-commerce penetration rate in Brazil is still relatively low compared to South Asian markets, the company still has market potential. As for the VIP membership service, the growth of user subscriptions has been good, with 1.5 million users already subscribed, with a much higher purchase frequency than non-VIP users and better user retention rates. This does not conflict with VAS revenue itself. A large portion of VAS revenue comes from services such as Carriage Services Inc. and advertising. In terms of overall monetization, there may not be a significant increase like last year, but there is still some potential. The company will adjust based on feedback from different market sellers, and currently has not received negative feedback from sellers regarding commissions. In terms of advertising, there is still great potential to increase ad monetization by optimizing market advertising efficiency and increasing seller adoption rates. In the finance technology sector, Brazil's FinTech business is relatively small compared to local Gross Merchandise Value (GMV), though the SPayLater (buy now, pay later) shopping GMV penetration rate is showing good growth. In terms of EBITDA profit margin, Brazil is at a mid-level compared to the company's other markets and has already achieved profitability in the Brazilian market. The company believes that Brazil is a promising market with great potential in the coming months and years. The long-term target of achieving an EBITDA profit margin of 2-3% is a meaningful reference range, but if market conditions and business growth are good, it could be better than this range. There is still potential for further improvement. The company will evaluate based on the competitive landscape, fundamental market growth, and reactions from buyers and sellers. Currently, the market still has great growth potential, with low e-commerce penetration rates. The decrease in VAS commission rates compared to the previous quarter is more influenced by GAAP accounting rules, where under GAAP terms the absolute commission rate deducted by the company's subsidies. The first quarter saw more shipping subsidies, offsetting some income. The company believes that shipping subsidies are an effective way to drive user growth, partly due to cost advantages in SPX. The company will dynamically adjust the allocation of different types of subsidies (such as shipping subsidies or other forms) and test and adjust daily and weekly based on market responses. While shipping subsidies were effective in the first quarter, they are not permanent, and the company will dynamically operate the business based on test results. Monee, the new FinTech business, relies on Shopee's growth. Compared to the Shopee platform, it will require different investments, but the impact on current EBITDA profit may vary.RateA: The growth of non-Shopee businesses mainly includes cash loans and SPayLater offline (non-Shopee platform) services. The cash loan business is actually very profitable, with a possible asset return rate that may be better than the Buy Now Pay Later business on Shopee. It has developed well in the past, does not require special investments to drive growth, and does not affect the profit margin of this segment. As for SPayLater non-Shopee businesses, such as scanning national QR codes or specific categories (phones, motorcycles), the investment is mainly in building service teams. The company conducts its business cautiously, ensuring that the services launched overall have a positive return, rather than massive upfront investments. The company will leverage its existing user base, especially users accumulated through SPayLater, to promote new products to them, which helps save marketing costs and control risks. The impact on EBITDA does not come from upfront investments, but more from differences in profit margins in different countries and expansion into different subsectors. The profit margin of some non-Shopee products may be slightly lower, such as large motorcycle loans compared to small loans, but in absolute terms, they still bring positive EBITDA. Q: What investments has the company made in AI, how is the deployment situation, what are the plans, how is it currently helping to improve business efficiency, and how is it expected to improve business in the future? A: The company believes that AI will bring about significant changes to the industry, both for consumer-facing and internal product improvements. In terms of consumer-facing aspects, the company deploys AI solutions for search, recommendation, and advertising, which can more accurately target users, improve the accuracy of product recommendations and advertising efficiency during user searches, thus increasing user engagement. Additionally, AI is used to help sellers in IGC production, generating product videos based on images or descriptions to increase video coverage of product descriptions. The company has clear ROI measurement standards for AI investments, measuring investment returns through metrics like click-through rates and conversion rates, and currently, most meaningful AI investments have positive returns. In terms of internal product improvements, the company uses AI to help the internal onboarding team manage the market more efficiently, to discover content, fraud, and other issues at a lower cost, and also ensure a positive return by measuring AI investments against cost savings.