DouYu International Sees User Growth, Doubled Revenue
Despite a slowdown in the game livestreaming industry, DouYu posted a 15% user growth in the third quarter, sending its shares up 2% on Wednesday.
The stock in DouYu International Holdings Ltd. (Nasdaq: DOYU) closed 2% higher on Wednesday, at $7.84 per American depositary share, after the company announced strong livestreaming revenue for the third quarter.
The Wuhan-based entertainment platform said in a statement today that in the three months through September its revenue has nearly doubled to $261 million, up 81% year-over-year. DouYu attributed the growth to its livestreaming revenues, which was $223.4 million, up 83% from the same period last year.
Net loss in the third quarter narrowed to $23.2 million, or 4 cents per ADS, compared with $32.1 million a year ago, according to the report.
Despite a slowdown in the industry, DouYu said its platform had 163.6 million monthly active users in the third quarter,15% higher than in the same period last year.
"We believe that the recent slowdown of the MAU growth in the game live-streaming industry was mainly due to a lack of megahit games in 2016 and 2017. So it highly depends on content offerings especially new to content," Shaojie Chen, the founder, chief executive officer and director of DouYu told analysts in a conference call on Wednesday.
He added, "So with the reopening of the game licensing with more approval, as well as the continued investments and development of new games by game developers such as Tencent, we are quite optimistic about user growth for the fourth quarter of 2019 and the full-year of 2020. We also believe that the game live-streaming industry has a very high growth feeling and is large enough to accommodate all players."
DouYu said it plans to continue its expansion across Asia. Nikkei Asian Review reported in July that Douyu had plans to enter a partnership with Japanese global investment company Mitsui & Co. Ltd.
"As we expand overseas, we are actively exploring the monetization potential of select countries such as Vietnam, where we have already secured a foothold in the markets. Additionally, in Japan, we have also launched products and continue to maintain a healthy pace of progress," Chen said.
Douyu said it expects to generate revenue in the range of $278.8 million to $288.8 million in the fourth quarter, representing a year-over-year increase of between 69% and 75%.
Backed by Chinese tech giant Tencent Holdings Ltd. (HKEX: 0700), DouYu raised $775 million in its initial public offering in July. However, its stock has traded well below its issue price of $11.50 per ADS, weighed, among other factors, by allegations by Chinese regulators that it illegally collected data from its users.
On Thursday, capital markets in the United States will be closed in observance of Thanksgiving. The Nasdaq and the New York Stock Exchange will resume regular operating hours on Friday.