With the stock trading below the net cash value, I believe it’s more efficient to buyback versus paying cash dividend. So that’s my response to payout ratio. Is there a question about why not paying a regular dividend and why not — regular dividend. So, why not a regular dividend plan? We’ve been paying cash dividend for — against the past six years or seven years in a row. And we’ve said many times that if we continue to generate more excess cash than what we can effectively deploy, we will continue to return them to the shareholders either through dividend or share repurchase. So whether or not we have a more regular plan or not, we’ve already get the expectation right. At the same time, we’re still seeing — like we said before, we are still seeing any growth opportunities and investment areas.
And without 100% flexibility in foreign exchange, it may not be too wise to be pinned down by a regular dividend payout ratio every year. I think I heard a question on how we plan to manage the repurchase program. I think from today’s earnings release, you can see that we announced an extension of the share repurchase plan. That extension of the plan would allow us to purchase up to RMB200 million for the two years period from now onwards. So like I said, we consider our stock at this point significantly undervalued and it’s trading at net cash value. We’re going to utilize that cash and take the opportunity to create more shareholder value. That’s for sure. Hopefully, that answers your question. Back to Ashley.
Ashley Jing: Operator, next question, please.
Operator: Thank you. The next question is from Leo Chiang from Deutsche Bank. Please go ahead.
Leo Chiang: Thank you management for taking my question. My question is about core Momo. Could management share the business outlook of core Momo on both live broadcasting and VAS in 2024? How the current macro environment has impacted the spending for core users? And lastly, how to view the profit stability of the core Momo in 2024? Thank you.
Yan Tang: As Sic mentioned earlier, our goal for the Momo app is to maintain the productivity of the cash cow business within a healthy social ecosystem. Given the uncertainties in the current market environment and consumer spending sentiment. In order to ensure users’ social experience and prevent broadcasters and agencies from adopting a radical modernization approach to obtain competition event-related bonuses, we plan to reduce the scale of bonuses to deemphasize our large-scale competition events in live streaming and value-added services that may lead to periodic revenue search. Such an arrangement will undoubtedly cause a decline in competition-related revenue, but we believe it will play a positive role in ensuring the social experience, engagement and retention of paying users, especially of those high-paying users.
On the product and operation front, we will better leverage monetization opportunities brought by more and more social attributes, and enrich gamified features and interactive tools for the top and middle cohort users to drive organic revenue growth. Momo is a mature brand with a 12-year history, but our product team has always been passionate about product innovation. As a result, over the past few years, Momo has demonstrated outstanding stability in terms of user traffic and profitability. Although the challenges in the current external environment are still tough, we believe that as long as we stabilize our basic social fundamentals and continue to make efforts to progress with time, Momo will continue to be a healthy and stable cash cow for the foreseeable future.
providing a solid foundation for the group’s future expansion. As for the specific financial related guidance for ’24, Cathy will answer.
Hui Peng: Okay. I guess, in her prepared remarks, Sic has already spelled out the priorities on management’s agenda for 2024. Let me try to translate them into the impact on financials. When we say Momo segment, that segment actually includes the cash cow business of the old Momo app and also the revenue generated by the new applications, mainly SoulChill. For the cash cow business, one of the key themes is to this year is significantly deemphasized on the promotional events and the competition for regulatory reasons. And that would involve changing the operational strategies and bonus structure for both live streaming and value-added service business. And that could significantly lower the event a cash competition-driven tipping revenue.
However, the non-event and more organic part of the revenue will increase. In the near term, though, it’s difficult for the organic part to make up for the event-driven revenue that we’re going to lose. So I guess the top line for the cash cow business will continue to see some pressure on a Y-o-Y basis for the coming few quarters because of that operational that strategy changing operational policies. With regards to social and other new applications, we continue to see pretty strong growth momentum, which is going to partially offset the decline of the cash cow business. So if you put the different pieces together and try to get a more quantitative outlook, this is probably what I can say at this point. We’ve already given our Q1 guidance, as you can see, at midpoint, we’re seeing a — somewhere around 10% year-over-year decrease for Momo segment.
In it, I guess, the cash cow is declining mid-teens percentage, offset by a 40%-something Y-o-Y growth from the new applications. I don’t have enough visibility to pin down the rest of the year with very reliable numbers. But I guess we can use Q1 as a good basis for the projection into the last few quarters of the year. And how do we move from Q1 will heavily hinder upon several factors, namely the macro, the regulatory environment and how well we execute our overseas strategy. So I guess that’s what I can say at this point. I will keep you updated as the year progresses. Now back to Ashley for more questions.
