This telephone conference focuses on Company C's financial performance in the second quarter of 2025, including strategy updates, operational highlights, and financial results. The conference discussed possible risks and uncertainties that may affect the future, and also discussed non-GAAP financial metrics such as adjusted EBITDA, emphasizing its importance in understanding the primary business cash flow. The investor relations team explained the use of non-GAAP metrics and provided a comparison with GAAP metrics.

The e-commerce platform Shopee achieved strong growth in the second quarter of 2020, with active buyers and purchase frequency continuing to rise, driving record-breaking GMV and revenue. Shopee has increased profitability and enhanced user loyalty and merchant satisfaction through measures such as increasing advertising revenue, optimizing logistics efficiency, and strengthening the content ecosystem. Particularly in the Brazilian market, Shopee has consolidated its market-leading position and achieved profitable growth by optimizing logistics and expanding product categories. The company will continue to innovate, expand market share, and enhance long-term profitability.

Digital financial services performed well in the second quarter, with revenue and adjusted EBITDA increasing by over 20% year-on-year, healthy loan portfolios, and stable non-performing loan rates. The business diversified, reducing reliance on a single market, with standout performance in Malaysia, Indonesia, Thailand, and Brazil. Deep integration with the shopping ecosystem and the use of AI to optimize credit models effectively drove growth in products such as post-shopping installment payments, offline pay-later services, and personal cash loans. Specifically, the loan amount in the Malaysian market surpassed $10 billion, and Thailand and Malaysia have successfully integrated the national QR code network, providing a seamless offline payment experience. Overall, the digital financial services business is still in the early stages in several markets, demonstrating strong long-term growth potential and profitability.

In the second quarter, Garena showed strong business growth, with key games such as Free Fire achieving double-digit growth. The launch of the new map Solara and the collaboration with Netflix for a celebratory event were well-received by players. The company has raised its full-year revenue forecast and is committed to continuous innovation and market expansion.

In the second quarter of 2025, the total revenue of the company reached 5.3 billion US dollars, an increase of 38% year-on-year, mainly due to the growth of e-commerce and digital financial services. Adjusted EBITDA increased by 84% from the same period last year to 829 million US dollars. The total order value on the e-commerce platform increased by 29% to 33 billion US dollars; revenue from digital financial services increased by 70% to 883 million US dollars. Revenue from digital entertainment increased by 28% to 569 million US dollars. As of the end of June, the balance of consumer and small business loans reached 6.9 billion US dollars, an increase of 90% year-on-year. Net profit for the second quarter was 440 million US dollars, an increase of 450% year-on-year.

The discussion focused on the 25% year-on-year growth rate of the e-commerce platform GMP in the first half of the year and the future guidance outlook. It emphasized that the growth momentum in Q3 will continue, and the full-year growth rate will exceed previous expectations. When discussing the Brazilian market, it was pointed out that despite actions taken by competitors, the business itself is experiencing stable growth. By optimizing the logistics cost structure, maintaining price competitiveness, and expanding high-value sellers, it is expected that the growth trend will not be affected.

Discussed the potential and cost impact of the VIP membership program on e-commerce platforms in the Indonesian market, as well as the target countries and cost considerations for the newly launched instant delivery service. Mentioned the seasonal fluctuations and long-term improvement trends of EBITDA profit margins. Emphasized the importance of initial investment in membership programs and cultivating user habits, while noting that high-value users are more likely to accept instant delivery services, which is believed to have a positive impact on business growth.

Discussed the impact of emerging competitors in the Brazilian market such as Timo and TikTok, as well as the market share of high-value products. Analyzed the growth of the gaming business driven primarily by "Free Fire" and looked ahead to opportunities brought by new maps and IP collaborations. Additionally, explored the growth strategies of financial technology in Brazil, including increasing BNPL penetration rates and differences with Asian markets.

The dialogue revolves around the adjustment of the e-commerce platform ecosystem, discussing the impact of changes in commission rates on ecosystem health, as well as the significant growth of loan businesses in the Brazilian market. It emphasizes the promotion of loan business development through the integration of external data and optimization of risk assessment systems, and also looks forward to the potential of the Brazilian financial market and future product planning.

Discussed the increase in conversion rates and future potential brought by upgrading advertising technology, emphasizing the role of AI technology in optimizing algorithms. At the same time, analyzed the impact of logistics improvements in the Brazilian market on profitability, and proposed the need to balance investment with profitability to achieve long-term development.

The logistics services in Brazil have effectively reduced capital expenditures by focusing on investments in automatic sorting machines and distribution center construction, rather than heavy assets such as land and trucks, reducing the capital burden. With the expansion of SPX coverage and efficiency improvements, this strategy continues to drive improvement in EBITDA, allowing the Brazilian business to remain profitable even in a high-speed market growth.

The discussion revolved around the growth goals of the advertising business and the application of AI technology. It mentioned that the current level of the advertising business is at 2%, with a medium to long-term goal of 4%-5%, and discussed the application of AI in improving advertising technology, internal operational efficiency, and potential new business expansion, such as product description generation, customer service automation, and marketing campaign optimization, showcasing AI's comprehensive empowerment of the business.

Discussed the initial performance of new games in the gaming industry other than Free Fire, such as Delta Force, emphasizing the application of AI in game development and player interaction, including improving production efficiency and enhancing player experience, especially through AI-generated content and promoting team games, demonstrating the profound impact of AI technology on the gaming industry.

Discussed strategies to ensure consistency and high quality user experience in large-scale applications, expressed confidence and expectations for achieving this goal, thanked participants, and previewed the communication plan for next quarter. The meeting ended in a friendly atmosphere.