Before the US stock market on March 19, the game live broadcast platform Douyu announced its fourth quarter and full-year financial report for fiscal 2019. Judging from the financial report, in the fourth quarter, Betta's revenue and net profit have achieved substantial growth, exceeding market expectations, and successfully turning losses into profits in 2019. A number of core data have maintained a good growth rate.
Stimulated by financial results, Douyu's stock price rose against the trend as the U.S. stock market continued to decline. Before Thursday's session, Douyu's stock price soared 5.3%, and closed with a 4.01% increase that day to $ 8.04.
Being able to gain investors' favor in the context of the current US stock market situation is not optimistic. In addition to the brilliance of financial performance, it actually reflects the growth potential of the effective market strategy behind Betta. So, what did Betta do right in 2019? With the increasingly fierce competition in today's game live streaming industry, where is Betta's future development? Some of the value points of this latest financial report of Betta are worth paying attention to.
Achieving a turnaround in 2019, a number of core data growth rates are gratifying
The financial report shows that the total betta revenue in the fourth quarter increased by 77.8% year-on-year to 2.06 billion yuan. Among them, the platform live broadcast revenue increased by 84.1% year-on-year to 1.89 billion yuan from 1.028 billion yuan in the same period in 2018. Driven by the brand activities such as Yule Festival, Betta's brand effect continued to expand. Platform advertising and other revenue also increased from 29 million in the fourth quarter of 2018, an increase of 29% year-on-year to 170 million. Revenue.
In terms of user data, Douyu's MAU in the fourth quarter was 166 million, an increase of 8% year-on-year. In monthly live data, Betta continues to lead Huya's latest monthly live count of 150 million. At the same time, Douyu maintained its leading position in paying users. In the fourth quarter, this figure increased by 70.8% year-on-year to 7.3 million, higher than Huya's 5.3 million during the same period. The payment rate increased from 2.8% in the same period last year to 4.4%; the quarterly average ARPPU was 261 yuan, a year-on-year increase of 7.8%. It can be seen that many indicators of Betta fish surpassed Huya.
Benefiting from the increase in MAU, average number of paying users, payment rate and ARPPU during the quarter, Betta's profitability has been comprehensively improved. In the fourth quarter, Betta's gross profit surged 934.6% year-on-year to 375 million yuan, and gross profit margin also increased from 3.1% in the same period in 2018 to 18.2%. The increase in profitability directly increased net profit. During the quarter, under non-GAAP, the platform ’s quarterly net profit for the fourth quarter of 2019 was 186 million yuan, a year-on-year increase of 180% and a net profit margin of 9%. It is worth mentioning that this is the fourth consecutive quarter that Betta has achieved profitability.
Looking at the whole year of 2019, the data shows that in the past year, the total revenue of Betta fish increased by 99.3% from 3.654 billion yuan in the same period of 2018 to 7.283 billion yuan. Under non-GAAP, Douyu recorded a net profit of 346 million yuan in 2019, with a net profit rate of 4.8%. In addition, as of December 31, 2019, the balance of betta cash, cash equivalents and restricted funds was 8.13 billion.
Judging from the financial report, Betta has made important breakthroughs in the whole year of 2019 and multiple data in Q4. The profitability is steadily improving, and it has nearly doubled its growth on the basis of 2018. At the same time, it is also successfully achieved in 2019 Fully profitable. Being able to make such a big breakthrough in one year can't help but ask people, how did Betta do this year?
What did Betta do right behind the beautiful financial results?
Nowadays, the opponents on the live track are not just tiger teeth, but fast players and station B are also increasing the layout of live games. With the intensification of competition in the live broadcast industry, the era of pure broadcasters has gradually passed. With the demographic dividend period of the entire industry close to disappear, the era of content is also coming. Betta can make a big breakthrough in 2019. The important reason is that it is stepping on the air of the live broadcast industry and entering the era of content king. It has kept up with the pace of market innovation through the strategy of laying out the entire industry chain of e-sports.
Betta's ability to achieve unexpected results in the fourth quarter, especially a significant increase in gross profit margin, achieved a net profit surge of 180% year-on-year, and achieved full profitability in 2019, which is actually due to Betta's monetization ability and operational efficiency Substantially improved, which led to the increase in the size of paying users and ARPPU data, and then achieved a breakthrough in gross profit margin. But the deeper reason is that the continuous increase of Douyu has contributed to the layout of the e-sports industry chain.
At present, the competition between live broadcast platforms has entered the second half, and the competition among various players has also developed into an ecological battle. At this time, how to create a high-quality game content ecology is the key to the development of the game live broadcast platform. Betta has made great efforts to create a quality content ecosystem that focuses on games and e-sports, and radiates outdoor, entertainment, secondary, science and education. By integrating e-sports teams, e-sports events, self-made events, and self-made programs 1. The content resources of star players anchoring at the forefront of the industry to build a competitive moat that cannot be underestimated.
In the fourth quarter, Douyu broadcast more than 100 large-scale electronic competitions. With the attention of the industry's top competitions such as the 2019 League of Legends Global Finals, the 2019 League of Legends Demasia Cup, and the PGC Jedi Survival Global Finals, Betta successfully attracted 100 million core game users come to the platform to watch the live game. The platform also created more than 50 self-owned event brands, including the Betta Gold Grand Prix S8, the Betta Dota 1 third Super God Cup, the Betta CFM Asia Cup China-Vietnam Invitational. By signing a contract with top e-sports events, Douyu has created more than 50 elite e-sports programs and activities for different e-sports game styles.
At the same time, Betta further increased its layout in the e-sports industry chain. Douyu signed top teams such as King of Glory League Champion eStar and Jedi Survival PGC World Champion Gen.G and other teams to cooperate in depth to create high-quality live content.
It is through the cooperation of top-level e-sports teams, the signing of high-quality anchors, the creation of quality live broadcast content, the purchase of event copyrights, etc. that have enriched the platform's content ecology, thereby enhancing user activity and user retention, making the average MAU in the fourth quarter increase by 8 year-on-year %, The average MAU of mobile terminal is 54.4 million, an increase of 30% year-on-year, and the number of paying users has also surged by 70.8%.
As the industry gradually enters the post-live broadcast era, the market is increasingly testing the ecological service capabilities of live broadcast platforms, and users ultimately choose to pay for continuous high-quality content. Betta proved the effectiveness of the strategy of the entire industry chain layout of e-sports in 2019, which also brought a trace of good news to its future development.
After the end of the epidemic, will the 5G tide or acceleration come to betta's "cloud game + live broadcast" mode? Is it worthy of attention?
Right now, affected by the epidemic, many industries have been affected, including many offline e-sports events also face the problem of suspension. According to statistics, more than 400 offline e-sports events in Shanghai alone have been affected to varying degrees. As the epidemic continues to spread around the world, it is foreseeable that offline e-sports events and activities worldwide will be impacted by the epidemic for some time to come. Was the betta affected during the outbreak? After the epidemic is over, will it deserve long-term attention?
1. Epidemic situation promotes online consumption of betta fish to win "outbreak" harvest
But for Betta, on the basis of the epidemic's promotion of the online consumer economy and the benefit of Betta's online live broadcast, the popularity of online e-sports will also increase, which will allow Betta to fear the impact of the epidemic in 2020 It maintains rapid development in the year. In fact, during the epidemic, as a local Internet company in Wuhan that started with online live broadcasts, Douyu donated 10 million yuan to the Hubei Provincial Charity Federation. At the same time, it also took advantage of its own live broadcast business to organize a series of anti-epidemic live broadcast topics. In order to fight against the epidemic from multiple dimensions, and implement the social responsibilities of Internet companies. Judging from the measures taken during the outbreak of betta fish, it also reflects that the outbreak has little impact on betta fish. Instead, as a betta that has the advantage of online live broadcasting, it has won the "epidemic" harvest.
According to statistics from third parties such as Questmobile and Xiaohulu, initially, the current average daily DAU, average daily viewing time, and average daily gift income of Betta have increased significantly year-on-year and month-on-month. In addition, according to related data such as the "Mobile Epidemic" report released by QM, during the epidemic, users of the game live broadcast platform represented by Betta increased significantly. The Betta live broadcast app had 15.0789 million daily live users on February 19, up 25% from before the Spring Festival, and ranked first in the game live broadcast industry.
Therefore, in the fourth quarter financial report, Betta predicts that it will continue to grow in the first quarter of 2020, and the company's net revenue will be between RMB 2.1 billion and RMB 2.16 billion, an increase of 41% to 45% year-on-year.
At the same time, in terms of policies, the central government pointed out that expanding consumption is one of the important focuses of the impact of the hedging epidemic, and issued a series of policies to accelerate the release of emerging consumer potential, actively enrich 5G technology application scenarios, drive 5G mobile phones and other terminal consumption, and promote the increase in e-commerce , Online education, online entertainment and other aspects of consumption. This has injected a dose of stimulant into the development of the e-sports industry and the game live broadcast industry, which is undoubtedly a huge benefit.
2. The 5G network tide hits the "cloud game" business full of imagination
In the fourth quarter, Betta increased investment in technology research and development in broadband cost control, user experience optimization, 5G technology, and cloud gaming platforms. In fact, this also reflects the importance of technology for Betta from the side. In the face of the 5G network tide, Betta first took the initiative to explore the combination of 5G technology and live broadcast scenes, which further ensured that the live broadcast platform was smooth, clear, and did not drop frames , Without delay, thereby optimizing the user experience and increasing user stickiness.
According to statistics, Betta launched the industry's first cloud gaming platform in November 2019. At present, nearly 20 end-games and more than 30 mobile games that are most popular with Betta users have been deployed in the cloud. Behind the "cloud game" business, Betta is expanding the track horizontally along the pattern of the game industry. This is undoubtedly injecting fresh blood into the super content ecology of Betta and exploring more possibilities. Betta also said that it will continue to improve the game experience of the majority of players in the future, and further explore the commercial possibilities of "cloud games + live broadcasting" under the 5G network.
In the past, the anchor and the means for the anchor to interact with the user were nothing more than barrage and Lianmai. However, the emergence of the cloud game mode can quickly switch the control of the game between the anchor and the user, and can also achieve special scenarios such as allowing the user to play and push the stream quickly, plus this year is called the first year of 5G, which is even more Expanded the imagination of the combination of live broadcast platforms and cloud games. Golden, the person in charge of Betta Cloud Games, said that after several months of testing, it is found that the number of users who become Betta through cloud games currently accounts for a relatively high number, close to 30%. This means that Douyu's "live-streaming + cloud game" strategy can complement each other's business.
From the perspective of industry, since last year, many giant companies such as Huawei, Tencent, NetEase, China Mobile and others have announced plans for cloud gaming. A-share companies such as Century Huatong, Perfect World, and Sanqi Interactive Entertainment are not far behind. Game track. After Google released the cloud gaming platform Stadia, the concept of cloud gaming soared, and gaming stocks ushered in a daily limit, which is destined to explode cloud gaming in 2020. Third-party data predicts that China's cloud gaming market will continue to grow rapidly in the next three years. The number of cloud gaming users is expected to reach 658 million by 2023, and China's cloud gaming market is expected to reach 98.64 billion yuan.
Under the combined effect of the development prospects of 5G and cloud gaming industry, in the near future, the strategy of "cloud gaming + live broadcasting" may become the vane of the entire industry. For Betta, which has a first-mover advantage in the field of cloud gaming and currently has a leading position in the innovation of the game live broadcast industry, it will naturally gain more attention.
In view of its long-term and considerable profitability, before this, Betta was favored by many brokers and institutions such as JPMorgan Chase, Bank of America Merrill Lynch, Citi, CITIC Securities and so on. For the current valuation of Betta is not too high, both Citi and JP Morgan have published research reports that they are seriously underestimated. According to Citi's previous predictions, Betta will start a big profit explosion in 2020. It is expected that the net profit will reach 1.14 billion yuan in 2020, and PE (2020E) will be 15.3 times. Earlier, Bank of America Merrill Lynch also believed that due to Betta's huge user base and continuously improving operating capabilities, Betta has a higher growth potential than similar platforms in the future, and it is expected that Betta's net profit will reach 1.9 billion in 2020 yuan. JPMorgan Chase also conservatively estimates that the MAU of Betta will reach 228 million in 2023.
In general, under the currently created super-strong content ecosystem, Betta has become a super e-sports live broadcast platform, and the cloud game business is also adding to its own moat. With the continuous improvement of profitability, the follow-up "cloud game + live broadcast" two-pronged model will also bring more room for imagination. The continued profitability in the future is expected and worth long-term attention.
Source of this article: American Stock Research Institute, please indicate the copyright
