This is the third year that Huanju Group has achieved continuous positive profitability.
On the evening of March 18, 2024 Eastern Time, Huanju Group (NASDAQ: YY) released its financial reports for the fourth quarter and full year of 2023. This was also the first time that Huanju Group had released its financial reports after Baidu announced its abandonment of the acquisition of YY Live. In 2023, Huanju Group achieved a revenue of 2.27 billion US dollars, a year-on-year decrease of 5.9%, with a revenue of 570 million US dollars in the fourth quarter; However, the annual net profit increased by 47% year-on-year to $293 million.
Before the financial report was released, the closing price of Huanju Group was $33.37 per share, an increase of 3.44% from the previous day, with a total market value of $2.029 billion. Its post market price increased by 2.04% after the financial report was released.
It is worth noting that since Baidu announced the termination of its acquisition of YY Live, the stock price of Huanju Group has not turned around after a sharp drop - after a 14.7% drop on January 2, its per share price has not returned to $35.
According to the financial report, BIGO, the largest business unit of Huanju Group, is steadily attracting users and creators. In the fourth quarter, BIGO's global business continued to recover, with revenue increasing by 3.1% year-on-year and paying users increasing by 7.9% year-on-year. Among them, BIGO's live social product, Bigo Live, saw a year-on-year increase of 4.5% in MAU in the fourth quarter to 38.4 million. Bigo Live has turned its attention to non professional broadcasters and launched new creator incentive programs in various regions around the world, emphasizing support for amateur broadcasters and UGC content. As of the end of 2023, it has attracted over 300000 amateur broadcasters to register. According to the 2024 Mobile Market Report released by market analysis firm data.ai, according to the scale of consumer spending in 2023, Bigo Live continues to rank second in the global social sector.
In addition, the interest social product Likee under this section launched a graphic and text publishing function in the fourth quarter, and introduced new models such as paid collection and single episode payment. The number of paid live streaming users has maintained a month on month growth for four consecutive quarters throughout the year. In the fourth quarter, the average usage time per person increased by 2.7% month on month, and user activity (DAU/MAU) increased by 2.2% month on month.
However, the key word for the BIGO sector in 2023 is still "recovery", and its future profitability is still unknown. Although BIGO's fourth quarter revenue increased by 3% year-on-year, its annual revenue still fell from $1.997 billion in 2022 to $1.92 billion in 2023, and its adjusted net profit remained at $288 million, unchanged year-on-year.
Overall, although Huanju Group optimistically points out that it has achieved profitability for three consecutive years, an inevitable fact is that profitability remains a thorny issue for Huanju Group. In the three consecutive years of profitability, the adjusted net profit margin of the BIGO business sector in 2022 reached 14.4%, a year-on-year increase of 6.6 percentage points; In 2023, the net profit margin quickly stagnated, only increasing by 0.6 percentage points year-on-year.
To address the issue of weak main business, Huanju Group is also attempting to enrich its revenue structure. According to the official statement, the proportion of non live streaming revenue of the group will increase to 12.7% in 2023, accumulating strength for the group's long-term development.