BlueCity (Nasdaq: BLCT) on Thursday posted strong top-line growth for the first quarter, as it looks to continue to expand beyond a dating app.
The operator of Blued, Asia’s biggest LGBTQ+ platform said in a statement today that its revenue in the three months ending March jumped 31% year-over-year to $41.4 million. According to Seeking Alpha, BlueCity beat expectations by $3.82 million.
The bulk of BlueCity’s revenue came from its live streaming services, which rose 22% to $33.6 million.
Other top-line segments including membership and advertising services experienced rapid growth, rising 76% and 114% year-over-year in the quarter. That came as more paying users flocked to its apps. Specifically, paying users increased to 640,000 from 433,000 in the same period of the preceding year, while monthly active users in the quarter climbed 38% to reach 8.3 million.
Along with Blued, the company operates other LGBTQ platforms including Finka, a social networking app that targets China’s younger gay community, and LESDO, serving the lesbian community, which were both acquisitions made by BlueCity in 2020.
Another highlight in the first three months of the year for BlueCity was revenues for He Health, its health service platform for males in China, growing nearly 300% $1.7 million.
In April, BlueCity announced that it obtained an internet hospital license for He Health, a move aimed to expand its sexual health services.
“This is another significant milestone for the Company as it presents a great opportunity to seize the underserved but rapidly growing health and wellness business,” Baoli Ma, BlueCity’s founder, chairman, and chief executive officer said of the internet hospital license for He Health.
“We believe we are well-positioned to benefit from this flourishing sector, and we are excited to launch China’s first internet hospital with a focus on men’s health for the brand's next stage of growth.”
Since BlueCity launched He Health in March 2019, the platform has expanded from covering sexually transmitted diseases to “men's wellbeing” each day. Since inception, BlueCity claims it has provided men's health and HIV prevention solutions to “tens of millions of users in China." It also jointly started a Danlan Public Interest Fund with the Chinese Foundation for the prevention of STDs and AIDS in 2019.
Given impressive growth on its He Health platform in 2020, as well as BlueCity's leading position in the LGBTQ+ social app space in China, India, Vietnam, Thailand, and Korea, I recommended a buy on BlueCity’s shares in April. Also, a major investment bank sees great value in the company, whose offerings expand well beyond dating apps. In December, Oppenheimer initiated coverage on BlueCity with an "outperform" and a price target of $20 per share. That implies 169% upside from its current trading levels. In the second quarter, BlueCity expects to generate revenue in the range of 1.41 billion yuan to 1.46 billion yuan ($228.32 million). That would represent year-over-year growth between 37% and 42%.
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