Shulou(Shulou.com)11/24 Report--

Beijing time, August 30, 2023, Huan Ju Group (NASDAQ:YY, referred to as "Huanju" / "Group") released its second quarter results of 2023. In the second quarter, Huan Ju Group had revenue of US $547.3 million and core business BIGO segment revenue of US $471.1 million. Under non-US general accounting standards, the group's net profit increased by 89.1 per cent year-on-year to $97.3 million, with a net interest rate of 17.8 per cent and an operating profit of $75.5 million and an operating profit margin of 16.0 per cent. The Group recorded a positive net operating cash flow of US $61.8 million.

In addition, Huan Ju Group also significantly accelerated shareholder feedback, adding US $214.3 million in share buybacks in the quarter and US $299.7 million in total returns to shareholders (including repurchases and dividends) in the first half of 2023, demonstrating the company's confidence in the long-term development prospects of the business.

Li Xueling, chairman and CEO of Huanju, said: "Huanju has stabilized revenue and achieved a steady increase in profits by focusing on cultivating users' content and social experience, promoting product optimization and operational innovation. At the same time, the group's global social entertainment MAU has achieved year-on-year and month-on-month growth. Among them, Bigo Live's MAU continued its strong growth momentum, with an increase of 18.0% over the same period last year. In the future, Huanju will continue to adhere to an effective and high-quality growth strategy, continue to promote product and operational innovation, continue to focus on global business, and give priority to investing resources in line with long-term strategic planning. "

Adhere to the effective and high-quality development strategy and the continuous growth of users of flagship products

In the second quarter, Huan Ju Group deeply cultivated the local market, enhanced the value of products from the aspects of product polishing and market operation, and constantly expanded the influence of product ecology in the local community. The number of global social entertainment users of the group continued to grow, with MAU reaching 275.6 million, achieving year-on-year and month-on-month growth.

Bigo Live maintained a strong trend of global user growth in the second quarter, with MAU growing 18.0% to 38.5 million year-on-year, achieving five consecutive quarters of double-digit growth. Among them, the European region grew 10.3% year-on-year, the Middle East region grew 14.9%, and Southeast Asia and other regions grew 20.8%. In terms of realization, Bigo Live's revenue stabilized in the second quarter, with developed countries represented by Europe, Japan and South Korea leading other markets in month-on-month revenue growth.

Likee's overall DAU continued to rise month-on-quarter this quarter, with DAU in some core areas achieving double-digit month-on-month growth, while Likee revenue increased by 11.2% month-on-month and continued to be profitable. This is the first time that Likee has achieved a break-even in the second half of last year after achieving a break-even in the second half of last year.

In the second quarter, the Hago camp recorded 6.4% month-on-month growth, the operation continued to improve, and the operating cash flow basically improved.

Polish products to optimize user experience with content and social as the main line

As the world's leading Internet company, Huan Ju Group focuses on content and social networking to polish its products. Driven by technology, product functions continue to iterate, user experience is optimized, user stickiness is enhanced, and community content is further enriched.

Taking Bigo Live as an example, with the help of AI tools, this paper makes a more in-depth analysis of user portraits, and proposes a finer-grained content layering policy and differentiated recommendation algorithm to enhance the user content experience. In addition to optimizing the algorithm at the technical level, in terms of content construction, Bigo Live has encouraged the content creation of BAR Tieba to increase the volume of video content creation by 26.5% compared with the previous quarter, and the number of video content sharing and downloads has doubled. Through the refinement and layering of users and optimizing the results of content distribution, the number of posts per capita has increased by 5.7% compared with the previous month, and user activity has continued to improve. In the direction of live broadcasting and making friends, the number of subscribers in Bigo Live multi-room increased by 1.0% month-on-month, and the number of live interactive users increased by 15.1% month-on-month.

Likee continued to strengthen community interaction. In the second quarter, the overall user activity of the market increased by 4.2% compared with the previous quarter, and the overall usage time per capita increased by 15.8%. IM penetration continued to increase, with an increase of 6.8%. At the same time, Likee continues to focus on deepening creator services, improving user content and social experience, optimizing the video creation process at the end through the online video collection feature, further helping creators to improve creation efficiency, and launching creator data analysis and targeted advice features to help small and micro creators better match the audience. Likee also supports creators to easily connect e-commerce and brand orders, providing creators with more cash modes. Through the creation of community interaction and quality content ecology, the size of Likee certified content creators has increased by 4.0% month-on-month.

During the quarter, Hago continued to focus on improving product efficiency and increasing user social stickiness, exploring consumption scenarios around room types and games, and optimizing the distribution efficiency of multi-person real-time interactive rooms in different regions. In terms of innovative 3D games, Hago continues to provide diverse and interesting interactive experiences, constantly enriching clothing and props resources, while exploring 3D interactive scene gamification experiments, online dressing up competitive games, and promoting the realization efficiency of virtual costumes. As a result, the penetration of Hago social channels increased by 1.2% month-on-month, and the per capita stay of channels increased by 5.2% month-on-month.

Innovative operation to enhance brand influence combined with community output positive energy

As a global technology company committed to creating value for users and communities, it is also constantly innovating in market operations in various regions. Online and offline innovative local activities introduce high-quality and diversified content supply for the platform, and constantly enhance the brand influence of products in the local community. At the same time, the combination of daily business operations and positive energy activities in the local community also brings users a sense of honor and satisfaction.

In the second quarter, we gathered in-depth community operation, and a series of local innovation activities were launched in various districts, continuing to bring quality content to users. Bigo Live teamed up with social media star Kway to launch dating Reality Show, which has garnered more than 2.3 million views. This program, from planning, production to publicity, is run by the Bigo Live team. It is another innovation of Bigo Live's continuous cultivation of local diverse content. The Bigo Live family monthly event has also attracted a large number of users' interest and attention. The number of contracted anchors in the family has increased by 5.1% compared with the previous month, and the average daily payers of the family has increased by 3.8% compared with the previous month. At Likee, the much-anticipated Likee 2023 summer party invited hundreds of top creators and representatives of large brands to recognize the outstanding creators of the year. The event welcomed the enthusiastic participation of many creators, and the party content shared by creators on the social media platform garnered more than 4 million views.

In addition to the meticulous cultivation of the community, Happy gathering is also combined with global operational activities to output positive energy for the local community. In the Middle East, Southeast Asia and other regions, products carry out a series of online activities in conjunction with local festivals. The platform encourages users to participate in online activities and record and share the good deeds around them, and supports users to participate in charitable activities in a more diversified form. In addition, the business operation is also combined with charity, partnering with local organizations such as Indonesia Cancer Foundation (YKI), Lebanese Children's Cancer Centre (CCCL), Jordan Tkiyet Um Ali (TUA), etc., to provide donations and assistance to local poverty, patient families and children. In the future, Huanju will continue to feed the community through innovative market operation activities.

Looking to the future, Huan Ju Group will continue to promote product and operational innovation, continue to focus on global business, tap long-term growth opportunities, connect a wider range of social sectors with business operations, and create more value for global users.

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