Online video streaming site posts 43 percent profit hike

Online video streaming operator YY’s revenue in the first quarter jumped 43 percent to US$518 million, beating analysts’ estimate of US$488 million, thanks to higher user engagement and the growing number of paying members.

Profit surged 80 percent to US$154.5 million after the success of spin-off Huya Inc, an online game streaming site that focuses on e-sports and gaming, in which it holds a majority stake. 

YY’s monthly active user base for mobile livestreaming services climbed 24 percent from a year ago to more than 77.6 million.

Huya, which was created out of YY and completed an initial public offering on May 11, reported quarterly revenue of US$134.5 million, more than doubling from the year before. Profit was 4.97 million yuan (US$778,000) against a 41.7 million yuan net loss over the same period last year.

Mobile live streaming and broadcasting continues to gain momentum, especially in niche sectors such as video gaming. Huya is sometimes compared with Amazon's video game and e-sports streaming subsidiary Twitch.

Domestic consultancy iResearch estimate that the entertainment related online streaming market size would reach 126.8 billion yuan within five years, but that the growth of active users would moderate over time. 

YY's US$272 million investment in Singapore-headquartered Bigo to increase its existing stake in the latter will help the firm widen its aim globally.

“The strategic investment in Bigo also helps YY capture global opportunities in terms of short videos and live streaming, and Huya is also expected to maintain profitability in the long run,” BOCOM International wrote in a research note today. 

It expects YY revenue will grow 36 percent in 2018 and 27 percent next year.