YY Inc. (YY) is a leading online streaming media and gaming
company in China. The company continues to invest in expanding both
within China and overseas. The market for streaming media in China has
experienced strong growth and is expected to continue to grow moving forward.
Purchasing shares of YY Inc. may provide investors with exposure to one of the
leading companies in an attractive market segment.
YY Inc. is a leading live streaming and social media platform in China.
The company operates two main platforms. YY Live offers live
entertainment and streaming through its mobile and PC applications. The
company’s Huya Broadcasting is a leading live game broadcaster in China.
The company offers live online streaming entertainment to its users.
Streaming services are offered on its mobile and PC platforms. User may
stream content in various channels including music, dance, and talk shows,
outdoor activities, sports, and games.
The company’s core YY Client product enables users to engage in live
online streaming. Users can watch content in channels featuring music,
dance, and talk shows. Users can stream their favourite online games either in
a casual or competitive format. Users may participate in dating
shows. Additional channels include finance, outdoor activities, and
sports. YY’s platform also allows users to create content.
The company’s channels allow users to purchase and give virtual gifts,
seeking further to monetise its user base.
Huya is a leading live game broadcaster in China. Huya enables
broadcasters and audiences to interact with each other during live
gameplay. Huya’s platform includes online, console, and mobile games,
entertainment, and sports.
Large and Growing User Base
The company’s investment presentation, citing research from Questmobile, touted
itself as China’s Number 1 live streaming social media platform in November
2018 based on Monthly and Daily Active Users (MAU & DAY), and total time
spent. According to the company’s website, YY’s had over 88 million MAU during
the third quarter of 2018. This represented a nearly 21% increase over
2017’s third quarter.
Strong Financial Results
In addition to MAU growth, the company’s Q3:18 earnings noted a 26.3%
year-over-year increase in total live streaming paying users.
Revenues increased by nearly 33% over last year’s third quarter, reaching RMB
4.1 billion. The company’s Huya platform experienced a 119% increase in
net revenues over this period. The company also initiated contests and
subscription offerings to monetize its user base. The company’s non-GAAP
net income attributable to YY Live, which measure excludes non-recurring
expenses, increased by almost 20%. Reported net income grew by 2.3%
According to Investor’s Business Daily, YY raised $180 million through an IPO
of its Huya Broadcasting division.
In June 2018, YY invested an additional $272 million in Bigo Inc., a
video-based social media platform headquartered in Singapore. Bigo’s
markets include Southern and Southeast Asia and the Middle East.
During the third quarter of 2018, YY entered into a strategic
relationship with Xiaomi to exclusively operate certain entertainment live
streaming services on Xiaomi Live.
The online streaming market in China has experienced strong growth and
expectations are for that growth to continue.
There were nearly 600 million social media users in China during 2017
and that number is expected to reach 725 million by 2022.
According to China Internet Watch, China’s adult population will spend, on
average, 6 hours and 23 minutes consuming media during 2018. They project
that 50% of that time will occur on the internet.
China online video market kept a high growth of around 50% for five
years running and made a record revenue of 95.23 billion yuan (US$14.9 billion)
in 2017. China had over 570 million online
video users, accounting for three-quarters of its total internet users.
YY Inc. is a leading Chinese live streaming company. The company operates
live streaming and live gaming platforms in China and through recent strategic
investments is looking to grow internationally.
The company has experienced strong result. Additionally, the
streaming market as a whole has experienced strong growth in China.
Purchasing shares of YY Inc., may provide investors with potential
exposure to the streaming media and gaming markets in China.
As of 20th June 2019, the Emerging Markets Internet & Ecommerce UCITS ETF (EMQQ) held 0.94% in YY Inc.
Read our EMQQ Whitepaper "The Great Confluence" here.
Find out more about the EMQQ Emerging Markets Internet & Ecommerce UCITS ETF.
Article Date: 17th March 2019.