The stock in DouYu International Holdings Ltd. (Nasdaq: DOYU) traded 2% higher to $7.84 per American depositary share on Wednesday intraday after the company announced strong livestreaming revenue for the third quarter.
The Wuhan-based entertainment live streaming platform said in a statement today that in the three months through September its revenue nearly doubled to $261 million, up 81% year-over-year. DouYu attributed the growth to its livestreaming revenues, which was $223.4 million, representing an increase 83% from the same period last year.
Net loss in the quarter narrowed to $23.2 million, or 4 cents per ADS compared with $32.1 million a year ago.
Despite the declines in for monthly active users in the live stream gaming industry, Douyu averaged 163.6 million in the third quarter, up 15% year-over-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 following the results.
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.
Backed by Chinese tech giant Tencent Holdings Ltd., (HKEX: 0700) DouYu raised $775 million in its initial public offering in July. However, Douyu has traded well below its IPO issuing price of $11.50 per ADS. Douyu was also alleged by Chinese regulators for illegally collecting data from users without permission in September.
As the company looks ahead, 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 in the call.
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%.