Core Viewpoint - DouYu International Holdings Limited plans to release its unaudited financial results for Q4 and the full year of 2024 on March 14, 2025, before the U.S. market opens [1] Group 1: Financial Results Announcement - The earnings release will be available on the Company's investor relations website [1] - A conference call will be held on March 14, 2025, at 7:00 a.m. Eastern Time to discuss the financial results [2] - The call can be accessed through various international and toll-free numbers, with a replay available until March 21, 2025 [2] Group 2: Company Overview - DouYu is a leading game-centric live streaming platform in China and a pioneer in the eSports value chain [3] - The platform operates on both PC and mobile apps, providing users with access to immersive gaming and entertainment livestreaming [3] - DouYu focuses on high-quality content production and a sustainable technology-based talent development system to enhance user experience [3]

Core Points - DouYu International Holdings Limited appointed Ms. Simin Ren as Co-CEO, effective January 16, 2025, marking the end of the interim management committee that had been in place since November 2023 [1] - The board of directors declared a special cash dividend of US$9.94 per ordinary share and per American Depositary Share (ADS), with a total payout of approximately US$300 million expected to be distributed around February 20, 2025 [2][3] Company Overview - DouYu is a leading game-centric live streaming platform in China, focusing on eSports and providing immersive gaming experiences through both PC and mobile applications [5] - The company aims to enhance user experience by integrating livestreaming, video, graphics, and virtual communities, while nurturing a technology-based talent development system [5]

Financial Data and Key Metrics Changes - Total net revenues decreased by 21.8% year-over-year to RMB1.06 billion, but increased by 3% quarter-over-quarter, marking the first sequential growth in eight quarters [32] - Live streaming revenues fell by 34.7% year-over-year to RMB0.75 billion, primarily due to prolonged macroeconomic challenges and shifts in user spending behavior [32][33] - Gross profit for Q3 2024 was RMB60.8 million, down from RMB192.4 million in the same period of 2023, resulting in a gross margin of 5.7% compared to 14.2% a year earlier [37] Business Line Data and Key Metrics Changes - The number of paying users in Q3 was 3.4 million, with a quarterly ARPU of RMB237, reflecting a year-over-year decline of 22.5% [21][33] - Innovative business segment revenues increased by 49.4% year-over-year to RMB311 million, contributing 29.3% of total revenue, driven by VoIP-based social networking and game membership services [34] Market Data and Key Metrics Changes - Mobile MAUs decreased by 18.6% year-over-year to 42.1 million, attributed to increased competition from short video platforms [9] - The company experienced a notable drop in paying users' willingness to spend on live streaming virtual gifts due to macroeconomic sluggishness [48] Company Strategy and Development Direction - The company focused on maximizing its core competitive edge, enhancing commercialization capabilities, and diversifying revenue streams while optimizing resources to reduce expenses [7][30] - A commitment to maintaining investments in premium content while implementing cost-saving strategies was emphasized to navigate macroeconomic challenges [16][43] Management's Comments on Operating Environment and Future Outlook - Management acknowledged fierce market competition and a softer macroeconomic environment impacting traffic and revenue, particularly from low-frequency users [47][48] - The company aims to enhance user retention and operational efficiencies while exploring new growth opportunities through diverse marketing products related to game props [54][56] Other Important Information - Cash and cash equivalents as of September 30, 2024, were RMB4.38 billion, down from RMB6.86 billion at the end of 2023, primarily due to a special cash dividend distribution and share repurchase program [41] - The share repurchase program of up to $20 million was completed by the end of Q3 2024 [42] Q&A Session Summary Question: Future growth of live streaming business and strategic changes - Management highlighted challenges from market competition and macroeconomic conditions affecting traffic and revenue, with a focus on retaining core users and enhancing content offerings [46][47][50] Question: Strategy to optimize cost structure and streamer operations - Management discussed refining content cost control, adjusting streamer compensation frameworks, and enhancing operational efficiencies to maintain high-quality content while managing costs [58][60][66] Question: Gross profit margin outlook for 2024 and beyond - Management noted that the decline in gross margin was primarily due to decreased live streaming revenues and increased revenue sharing fees, with ongoing efforts to optimize content costs and improve financial performance over time [73][79] Question: Performance of Black Myth: Wukong on DouYu platform - Management reported that Black Myth: Wukong significantly boosted traffic on the platform, with 23% of streamers on launch day streaming the game, and detailed strategies for promoting and retaining users through diverse content operations [81][84][92]

Core Insights - The article emphasizes a long-term investment strategy with a focus on a 5-10 year horizon, advocating for a diversified portfolio that includes growth, value, and dividend-paying stocks [1]. Group 1 - The investment approach prioritizes value stocks over others, indicating a preference for undervalued opportunities in the market [1]. - The strategy includes occasional options trading, suggesting a willingness to engage in more complex investment strategies when appropriate [1].

Financial Performance - Total net revenues for Q3 2024 were RMB1,063.1 million (US$151.5 million), a decrease of 21.8% compared to RMB1,359.2 million in Q3 2023[6] - Livestreaming revenues decreased by 34.7% to RMB752.1 million (US$107.2 million) from RMB1,151.0 million in the same period of 2023[7] - Revenue from innovative business, advertising, and others increased by 49.4% to RMB311 million (US$44.3 million), accounting for 29.3% of total revenue, up from 15.3% in Q3 2023[8] - Total net revenues for the nine months ended September 30, 2024, were RMB 3,134,826, a decrease of 26.0% compared to RMB 4,234,443 for the same period in 2023[32] User Metrics - Average mobile MAUs in Q3 2024 were 42.1 million, down from 51.7 million in Q3 2023[5] - The number of quarterly average paying users was 3.4 million, compared to 3.9 million in the same period of 2023[5] Profitability and Loss - Adjusted net loss for Q3 2024 was RMB39.8 million (US$5.7 million), compared to adjusted net income of RMB71.9 million in Q3 2023[16] - Gross profit in Q3 2024 was RMB60.8 million (US$8.7 million), down from RMB192.4 million in Q3 2023, with a gross margin of 5.7% compared to 14.2%[12] - The company reported a net loss of RMB 49,169 for the three months ended September 30, 2024, compared to a net income of RMB 76,377 for the same period in 2023[32] - Basic net income per ordinary share for the three months ended September 30, 2024, was RMB 0.11, compared to RMB 2.39 for the same period in 2023[32] - The adjusted net income for the nine months ended September 30, 2023, was RMB 151,073, while for the same period in 2024, it was a net loss of RMB 171,035[35] Cash and Assets - Cash and cash equivalents as of September 30, 2024, were RMB4,383.6 million (US$624.7 million), down from RMB6,855.5 million as of December 31, 2023[18] - Cash and cash equivalents as of December 31, 2023, were RMB 4,440,131, a significant increase from RMB 2,013,065 as of September 30, 2024[30] - Total assets increased to RMB 8,072,103 as of December 31, 2023, compared to RMB 5,506,137 as of September 30, 2024[31] Liabilities and Equity - Total current liabilities rose to RMB 1,376,069 as of December 31, 2023, from RMB 1,213,223 as of September 30, 2024[30] - The company’s total shareholders' equity as of December 31, 2023, was RMB 6,689,333, compared to RMB 4,285,957 as of September 30, 2024[31] - The company’s accumulated deficit as of December 31, 2023, was RMB 3,485,007, compared to RMB 3,618,725 as of September 30, 2024[31] Operational Focus - The company continues to focus on diversifying revenue streams and optimizing operations to enhance financial resilience amid a challenging macroeconomic environment[3] Research and Development - Research and development expenses for the nine months ended September 30, 2024, were RMB 147,526, a decrease of 32.2% from RMB 217,863 for the same period in 2023[32] Share Repurchase - The company repurchased an aggregate of US$20 million of its ADSs under the share repurchase program as of September 30, 2024[19] Impairment and Fair Value Adjustments - The impairment losses and fair value adjustments on investments for the nine months ended September 30, 2023, amounted to RMB 28,161, while for the same period in 2024, it was a loss of RMB 43,299[35]

Financial Performance - Total net revenues for Q3 2024 decreased by 21.8% to RMB1,063.1 million (US$151.5 million) compared to RMB1,359.2 million in Q3 2023[4] - Gross profit in Q3 2024 was RMB60.8 million (US$8.7 million), down from RMB192.4 million in Q3 2023, resulting in a gross margin of 5.7% compared to 14.2% in the same period last year[10] - Adjusted net loss for Q3 2024 was RMB39.8 million (US$5.7 million), compared to adjusted net income of RMB71.9 million in Q3 2023[14] - Net loss for the three months ended September 30, 2024, was RMB 49,169, compared to a net income of RMB 76,377 for the same period in 2023[37] - The company reported a basic net income (loss) per ordinary share of RMB 0.11 for the three months ended September 30, 2024, compared to RMB 2.39 for the same period in 2023[37] Revenue Breakdown - Livestreaming revenues fell by 34.7% to RMB752.1 million (US$107.2 million) in Q3 2024, primarily due to a decline in the number of paying users and average revenue per paying user[5] - Revenue from innovative business, advertising, and other sources increased by 49.4% to RMB311 million (US$44.3 million), accounting for 29.3% of total revenue, up from 15.3% in Q3 2023[6] User Metrics - Average mobile MAUs in Q3 2024 were 42.1 million, down from 51.7 million in the same period of 2023[2] - The number of quarterly average paying users decreased to 3.4 million in Q3 2024 from 3.9 million in Q3 2023[2] Cost and Expenses - Cost of revenues decreased by 14.1% to RMB1,002.3 million (US$142.8 million) in Q3 2024 compared to RMB1,166.8 million in Q3 2023[7] - Revenue-sharing fees and content costs decreased by 6.2% to RMB869.6 million (US$123.9 million) in Q3 2024, reflecting improved controls in streamer payments[8] - Research and development expenses for the three months ended September 30, 2024, were RMB 43,243, a decrease of 42.0% from RMB 74,510 for the same period in 2023[37] Cash and Assets - Cash and cash equivalents as of September 30, 2024, totaled RMB4,383.6 million (US$624.7 million), down from RMB6,855.5 million as of December 31, 2023[16] - Total current assets as of September 30, 2024, were RMB 4,397,677, a decrease of 34.2% from RMB 6,685,428 as of December 31, 2023[31] - Cash and cash equivalents as of September 30, 2024, were RMB 2,013,065, a decrease of 54.8% from RMB 4,440,131 as of December 31, 2023[31] Shareholder Equity and Liabilities - Total liabilities as of September 30, 2024, were RMB 1,382,770, an increase of 13.5% from RMB 1,220,180 as of December 31, 2023[30] - Total shareholders' equity as of September 30, 2024, was RMB 6,689,333, an increase of 56.3% from RMB 4,285,957 as of December 31, 2023[34] Future Outlook - The company provided a future outlook with an adjusted net income of RMB 151,073 thousand projected for the nine months ended September 30, 2024[41]

Core Insights - DouYu International Holdings Limited reported a significant decline in financial performance for Q3 2024, with total net revenues decreasing by 21.8% year-over-year to RMB1,063.1 million (US$151.5 million) from RMB1,359.2 million in Q3 2023 [1][2] - The company experienced a substantial drop in gross profit, which fell to RMB60.8 million (US$8.7 million) from RMB192.4 million in the same period last year, resulting in a gross margin of 5.7% compared to 14.2% in Q3 2023 [1][2] - DouYu's net income also decreased sharply, reporting RMB3.4 million (US$0.5 million) compared to RMB76.4 million in Q3 2023, while adjusted net loss was RMB39.8 million (US$5.7 million) compared to adjusted net income of RMB71.9 million in the same period last year [1][2] Financial Performance - Total net revenues for Q3 2024 were RMB1,063.1 million (US$151.5 million), down from RMB1,359.2 million in Q3 2023, marking a 21.8% decrease [2] - Livestreaming revenues decreased by 34.7% to RMB752.1 million (US$107.2 million) from RMB1,151.0 million in Q3 2023, attributed to a decline in both the number of paying users and average revenue per paying user [2] - Innovative business, advertising, and other revenues increased by 49.4% to RMB311.0 million (US$44.3 million), accounting for 29.3% of total revenue, up from 15.3% in Q3 2023 [1][2] Cost Management - Cost of revenues decreased by 14.1% to RMB1,002.3 million (US$142.8 million) from RMB1,166.8 million in Q3 2023, with revenue-sharing fees and content costs down by 6.2% to RMB869.6 million (US$123.9 million) [2] - Bandwidth costs saw a significant reduction of 32.0% to RMB72.2 million (US$10.3 million) from RMB106.1 million in Q3 2023, primarily due to decreased peak bandwidth usage [2] - Sales and marketing expenses decreased by 11.9% to RMB79.3 million (US$11.3 million), while research and development expenses dropped by 42.0% to RMB43.2 million (US$6.2 million) [2] Strategic Initiatives - The interim management committee emphasized adapting operational strategies to enhance efficiency and maximize ROI while investing in streamer resources and new ventures [1] - The company aims to diversify revenue streams and has made progress in this area, with innovative business revenues showing significant growth [1][2] - DouYu continues to prioritize long-term growth and shareholder value amidst challenges in the macroeconomic environment and industry shifts [1]

Core Viewpoint - DouYu International Holdings Limited is set to release its unaudited financial results for Q3 2024 on November 20, 2024, before the U.S. market opens [1]. Group 1: Financial Results Announcement - The earnings release will be available on the Company's investor relations website [1]. - A conference call to discuss the financial results will be held on November 20, 2024, at 6:00 a.m. Eastern Time [2]. - The call can be accessed through various international and toll-free numbers, with a replay available until November 27, 2024 [2]. Group 2: Company Overview - DouYu is a leading game-centric live streaming platform in China and a pioneer in the eSports value chain [3]. - The platform operates on both PC and mobile apps, providing users with access to immersive gaming and entertainment livestreaming [3]. - DouYu focuses on high-quality content production and a sustainable technology-based talent development system to enhance user experience [3].

Investment Rating - The report maintains a "Hold" rating for Douyu (DOYU.US) with a target price adjusted to $7.7 [2][3]. Core Insights - Douyu's revenue for Q2 2024 was RMB 1.03 billion, a year-on-year decline of 26%, but stable compared to the previous quarter. The adjusted net loss was RMB 45.5 million, with a net loss margin of 4.4% [2]. - Live streaming revenue decreased by 37% year-on-year to RMB 790 million, attributed to a weak macro environment and the introduction of lower-priced products with reduced promotional activities. Mobile MAU fell by 12% to 44.1 million, primarily due to competition from short video platforms, although core users remained stable [2]. - Innovative business, advertising, and other revenues reached RMB 240 million, a year-on-year increase of 81%, accounting for 23% of total revenue, driven by voice social and other innovative business initiatives [2]. - The company plans to deepen collaborations with game developers to enhance commercialization channels such as game memberships and in-game items, aiming for a diversified business structure [2]. Financial Projections - The report forecasts a continued pressure on growth due to the macro environment and industry competition, expecting the live streaming business to remain under pressure in the short term. The company is projected to incur losses for the full year [2][3]. - Following a dividend payout, cash reserves will decrease, leading to a decline in interest income. The company completed a $20 million share repurchase plan and announced a special dividend of $9.76 per ADS, totaling $300 million, which is expected to help enhance cash value [2].

Core Viewpoint - DouYu International Holdings Limited's Q2 2024 financial results were disappointing, with a negative short-term outlook due to unfavorable economic conditions in China, although the company has significant cash reserves that may allow for future shareholder returns [2][5]. Financial Performance - DouYu's Q2 2024 revenue decreased by 25.9% year-over-year, falling from RMB 1,392.2 million in Q2 2023 to RMB 1,032.0 million [3]. - The live-streaming segment, which accounts for 76.6% of total revenue, experienced a 37.2% year-over-year decline, with revenue dropping to RMB 790.1 million [4]. - Monthly active users in the live-streaming business decreased by 12.3% year-over-year to 44.1 million, while Average Revenue Per User (ARPU) fell by 25.5% year-over-year to RMB 243 [4]. - DouYu's normalized operating loss widened significantly from RMB 7.5 million in Q2 2023 to RMB 119.6 million in Q2 2024, indicating poor operating leverage due to fixed costs not decreasing in line with revenue [4]. - The company's actual Q2 2024 revenue represented only 23.7% of the full-year consensus forecast of RMB 4,355.1 million [4]. Economic Context - The decline in DouYu's performance is attributed to challenging macroeconomic conditions in China, with import growth slowing from 7.2% in July 2024 to 0.5% in August 2024, and automotive sales contracting for three consecutive months [5]. Shareholder Capital Return Potential - DouYu has cash and cash-like assets totaling RMB 6,561 million (approximately $903 million) as of the end of Q2 2024, suggesting ample capital for shareholder returns [6]. - The company announced a $300 million special dividend and has completed a $20 million buyback plan ahead of schedule, indicating a commitment to returning capital to shareholders [6]. - Management has expressed a determination to provide reasonable returns to shareholders, hinting at the possibility of future share repurchase programs or additional special dividends [6]. Valuation - DouYu's stock is currently valued at 0.40 times the consensus FY 2025 price-to-sales ratio, which is close to its historical three-year mean of 0.42 times [7].