[Foreign Language] In addition to the above, strengthening collaborations with various platforms and products is an important strategy for us in 2024. In an overall more open environment, these collaborations will bring more development opportunities and enhance HUYA’s competitiveness. This includes not only deepening interconnectivity and cooperations with Tencent’s PCG products, such as QQ and Tencent Video, as well as close collaborations with the IEG business units, but also content and operational partnerships with other live streaming and video platforms. For example, in February this year, we hosted a New Year Esports All Star event that was co-streamed across three other major live streaming platforms with good reception. In the long run, this will not only help our content reach a wider user base and bring more enriched offerings to existing users, but will also contribute to enhancing HUYA’s scale and influence.
Operator: Thank you. And our next question comes from Ritchie Sun from HSBC. Ritchie, please go ahead.
Ritchie Sun: [Foreign Language] Thank you, management, for taking my question. I would like to understand more on the cost control plan in this year. What’s management expectation on cost, operating expense, and margin this year? Thank you.
Ashley Wu: [Foreign Language] We continued our cost optimization and efficiency enhancement efforts in 2023 to better manage our costs and expenses and improve operational efficiency. The loss in Q4 2023 was mainly due to the seasonal impact of content costs, as some larger and more costly tournaments, like S13, took place in Q4. However, driven by declines in events and broadcaster costs as well as bandwidth costs compared to the same period in 2022, we saw a significant improvement in gross margin profits for Q4, with overall losses also narrowing year-over-year. For the full year, despite our revenue decline, revenue share and content costs decreased by 29% year-over-year, bandwidth costs decreased by 33%, and gross margin improved from 7.1% in 2022 to 11.7% in ’23.
Meanwhile, we achieved cost savings across all three operating expenses items i.e. sales R&D and G&A with total OpEx down by 13.1% year-over-year. As a result, HUYA’s operating cost loss narrowed in 2023, where we achieved non-GAAP net profitability of approximately RMB120 million. [Foreign Language] In 2024, in terms of costs, we’ll continue to strive for further optimization of event costs and relatively fixed signing costs for our broadcasters through a strict ROI analysis and optimized content investment strategies. As the game-related service business is still in its early stage, its gross profit margin is gradually stabilizing, but it will still be slightly higher than the live streaming segment. With the greater growth of the game-related services business, which has a higher gross profit margin, and the increase in its proportion of total revenue, we expect the overall gross profit margin to increase compared to 2023.
In terms of operations, we will also continue to maintain prudent spending, especially in the sales expenses and labor costs. Based on our current plans, we are confident in achieving profitability in 2024 with profit indicators improving compared to 2023.
Operator: Thank you. Now we will take our last question today from Thomas Chong from Jefferies. Thomas, please go ahead.
Thomas Chong: [Foreign Language] Thanks management for taking my question. My question is about our capital situation and the strategy of cash usage. Thanks.
Ashley Wu: [Foreign Language] As of the end of 2023, HUYA held nearly US$1.4 billion in cash, cash equivalents and deposits. The change in the amount compared to the end of September last year was mainly due to the business mergers and acquisitions and stock repurchase expenditures at the end of the year. In terms of distribution, majority of our cash, cash equivalents, and deposits are held in our offshore accounts in US dollars. [Foreign Language] As we mentioned earlier, we expect the profitability level in 2024 to have further room for improvement compared to the year before. And we also expect to achieve positive operating cash flow for the full year. Therefore, we’ll continue to have sufficient cash reserves to well support the development of our business.
At the same time, we will continue to carefully consider potential investment opportunities upstream and downstream of HUYA’s ecosystem to enhance the company’s competitiveness. With a healthy balance sheet and cash reserves, the company’s Board of Directors and management hope to use cash more efficiently, enhancing investor returns and convey long-term development confidence. [Foreign Language] In the US$100 million repurchase plan we announced last August, as of the end of December, we have repurchased US$28.8 million worth of HUYA stock, and we have continued to actively repurchase in the first quarter of this year. Today, we are also pleased to announce our first ever dividend payout of US$0.66 per ADS or per ordinary share, constituting a special cash dividend totaling at US$150 million for our long time supportive shareholders.
In the future, we will continue to explore ways to improve the efficiency of capital utilization and return to our shareholders.
Hanyu Liu: Thank you. Thank you once again for joining us today. If you have further questions, please feel free to contact HUYA’s Investor Relations through the contact information provided on our website or Piacente Financial Communications.
Operator: This concludes today’s call and we look forward to speaking to you again next quarter. Thank you. Bye, bye.
