Good morning, and good evening, ladies and gentlemen. Thank you for standing by and welcome to uCloudlink Group Incorporated, Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After prepared remarks by the management team, there will be a question-and-answer session. Today's conference call is being recorded. I would now like to turn the call over to your host today, Mr. Bob Shen, Senior IR Manager of the Company. Please go ahead.

Thanks everyone for joining us on our third quarter 2020 earnings call today. Our earnings release is now available on our IR website at ir.ucloudlink.com as well as via newswire services. Here I give a brief introduction to our uCloudlink Inc. team. Zhiping Peng, is our Co-Founder and Chairman of the Board of Directors; Chaohui Chen, is our Co-Founder, Director and Chief Executive Officer; Zhigang Du, is our Director and Chief Operating Officer; Yimeng Shi, is our Chief Financial Officer; Xinquan Xu, is our Chief Sales Officer. Our CEO will begin with an introduction of our company overview and the business highlights. This will cover section one and section two of the earnings presentation posted on our IR website. And then our CFO, Yimeng Shi will discuss our financial results in section three. Before we proceed, please note that this call may contain forward looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward looking statements are based on management's current expectations and observations that involve known and unknown risks, uncertainties and other factors not under the Company's control, which may cause actual results, performance and achievements of the Company to be materially different from the results performance or expectations implied by these forward looking statements. All forward looking statements are expressly qualified in their entity by the cautionary statements, risk factors and the details of the Company's filing with the SEC. The Company does not assume any obligation to revise or update any forward looking statements as a result of new information, future events, changes in market conditions or otherwise except as required by law. Please also note that uCloudlink's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as an audited and non-GAAP financial measures. uCloudlink's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. I will now turn the call over to our Co-Founder and CEO, Mr. Chaohui Chen. Please go ahead.

Yes, I'm Chaohui Chen. So let's turn to Page 4 our similar contents also earnings presentation of our second quarter of year 2020. I will now repeat in detail and I will pass through quickly. Please turn to Page 4, this is of our vision and mission. So our company basically I think we are working for let people and consumer connection anytime anywhere for the best network so this is our mission and vision. So on Page 5, so we use the Cloud SIM technology, so to be the world's first and leading mobile data traffic sharing marketplace because our technology is e-vital to build these marketplace, also please turn to the Page 6, is about our Cloud SIM instant switching technology, so in the Q3 we launched in Q3 and this technology is becoming the engine of the 5G Cloud Era. So accelerating 5G Cloud computing [indiscernible] early. For the Page 7, is about evolution of our Cloud SIM business model normally which has three business models in stage one with you and always to assist the business of our own and the flow of technology and the business model means our partner and agenda, we are coping this business model worldwide. [Indiscernible] some of our partner, so they are very become mature and wherein technology and also is very expert about our PaaS/SaaS management. We go to the PaaS/SaaS model. So let's see model in a three-stage, for the Page 8, is about our innovation Cloud SIM technology. So you can look it here for the information, for the technology. So Page 9, is our, is we have very clear growth strategy across our business model. We have three business models for different stages. So in history, we have very perceptible uCloud in 1.0 business. uCloud in…

Thank you, Mr. Chen. Hello everyone. Let's now turn to Page 16, our total revenue decreased by 59.2% from $44.1 million in the three months ended September 30, 2019 to $18 million in the three months ending September 30, 2020. Revenue from service were $9.8 million representing a decrease of 60.8% from $25.1 million for the same period of 2019. This decrease was primarily attributable to the decrease in revenue from international data connectivity service and the PaaS and SaaS service to certain extent, mainly because of continuous and a prolonged impact of pandemic or COVID-19. Service related revenue as a percentage in terms of revenues increased from 46.9% in the second quarter of 2020 to 54.7% during the third quarter of 2020. On other hand, 2.0 local data connectivity service was not impacted by COVID-19. And it is revenue increased by around three times from $0.7 million in third quarter 2019 to $2.5 million in the third quarter of 2020, which is partially offset the decrease of our 1.0 international data connectivity service. So far, we have started our 2.0 local data connectivity service in China and Japan. We will expand to all the potential markets such as Asia, the United States, European, et cetera. Revenue from PaaS and SaaS service were $1.5 million representing a decrease of 30.3% from $2.1 million in the same period last year. This decrease was primarily due to the negative impact COVID-19 from our partner that used our PaaS/SaaS service to provide international data connectivity service. In the meantime, the demand of our local data connectivity service, business partner are not affected. Revenue from sales products were $8.2 million decreasing of 57.1% from $19 million in the same period last year. This decrease was primarily due to the continuous negative impact of COVID-19…

Thank you. [Operator Instructions] The first question today comes from Aaron Ju with Tigress Partners. Please go ahead.

Hi, this is Aaron. Thank you management team for taking my questions. I had two questions. The first question is about the international side of the business. So how does this pandemic change your international strategy and how did you think about the pace of the recovery in the outbound travel? And my second question is about the 2.0 local data connectivity services business. So how this business performed sequentially in China post the COVID-19 outbreak versus prior to COVID-19 and any use of metrics you can share? Thank you.

I’m Chaohui Chen, CEO of the uCloudlink. For 1.0 as I mentioned before, it is impacted by the COVID-19. Currently, you can see the second wave and third wave its heavy impact of business global traveler. So that's good news, that’s bad news. But for good news I think we now can see release of a vaccine from China and from U.S. now has become more clear. So, I believe, next year in some distance in terms, in some condition and more possibility I think we are recovering from the COVID-19. So, we expect the next second half years of the COVID-19 will gradually become better because of the vaccine and the control. So, that is our expectation for 1.0 we believe from the second half of next year COVID-19 impact will reduce and global travel will gradually recover. You can see, recently like Hong Kong and Singapore and some bubble travelling already happened. I think that's the good news for us. So, I think 1.0 of course, it is dependent on COVID-19 control and vaccine. So, that’s our, judgment from the senior team from uCloudlink. For 2.0 business, so because in China, 2.0 in other countries is [indiscernible] control in China is widening control for telecom business. So, when this why we invest, in Huaxiang Lianxin, who is the mobile watch operator and also is why we are working with the key player in local, in the domestic market with the mobile one of the mobile network operators, because that's why we can get, we can overcome the barrier from the regulation, that is one. Another, we can faster growth from the currently existing user subscriber from the incumbent carrier or mobile watch operator. So, that's our consideration. You can see from the next quarter our business in China local, not only in the past our Chinese business many came from international. So local from next quarter, we believe because of the progress with the mobile watch operator and the mobile network operator working with them, we can regain the growth for Chinese local business.

Hi, Aaron. This is Bob Shen. Let me put more comments on your two questions. First, regarding your first question of the international travel, I think we heard more better good news besides the vaccines, research progress. For example, we looked into some reports regarding the international travel and shows that the international price began gradually to increase from third quarter now compared to the second quarter of 2020. And also you can see that the hotel occupancy rate has been increasing, which means that international travel has gradually become warm, we can see that. And also you can see, also see the news that more and more and the country and the regions they are trying to open cross-border activities. They are trying to open the airport for example, Hong Kong and Singapore, they are trying to build a travel bubble. If that bubble travel bubble has been established for people from Hong Kong to travel to Singapore then they do not need to do any quarantine. So which is also good news for international travel. I think we believe more and more travel bubbles will be established and eventually, more and more countries will open their cross-border activities. So that will benefit our 1.0 International business. Secondly for your second question regarding our local business in China, I think, apart from the alliance with MNOs and MVNOs also because our 2.0 local business have very wide aspects. For example, we also have global meetings with GMI which is embedded in various brands of mobile phone handsets. We are in the process of negotiating with more, such as the 5G related of mobile phones and the development and for commercial trials in the near future. So later on, we will have more brands of our famous mobile phone manufacturer, handset manufacturer to cooperate with us which we will publish PR news if that is being confirmed. And also regarding the 5G, I want to also mention here, because our four series of 5G mobile Wi-Fi, which we also call me MiFi, but formerly we call mobile Wi-Fi and also our customer pretty much his equipment, which is called a CPE and GMI also just mentioned, all these products are in the development for commercial trials in the near future. So all these good news will help to develop a further, faster and better our business in Mainland, China. So we believe that our China market will regain growth and we expect next year 2021 will be a new milestone for our business.

Thank you.

[Operator Instructions] There appears to be no further questions. I'd like to turn the call back over to management for any closing remarks.

Okay, thank you once again for joining us today. If you have any further questions, please feel free to contact the uCloudlink Investor Relations through the contact information provided on our website or TPG Investor Relations.

This concludes the earnings conference call. You may now disconnect your lines. Thank you.

Thank you.

Thank you.