Core Viewpoint - CITIC Securities has initiated coverage on JOYY Inc. (欢聚集团) with a "Buy" rating and set a target price of $97 for 2026, indicating significant upside potential from the current stock price [1] Group 1: Value Proposition - JOYY's current market capitalization is below its net cash on the balance sheet, which is approximately $3.3 billion as of Q2 2025 [1] - The company has announced a shareholder return plan for 2025-2027, including a share buyback of about $300 million and cash dividends of approximately $600 million ($50 million per quarter), resulting in an annualized shareholder return rate of around 10% [1] - The traditional live streaming business has stabilized after adjustments, with expectations of providing steady cash inflows in the future [1] Group 2: Growth Potential - The global third-party programmatic advertising market is experiencing rapid growth, with companies like Applovin and Mobvista showing strong performance [1] - JOYY's BIGO Ads platform benefits from its own data accumulated through a pan-entertainment and e-commerce ecosystem, allowing it to compete in third-party data with lower customer acquisition costs [1] - The advertising business is still in the early stages of accelerated growth, and analysts are optimistic about the rapid expansion of the third-party advertising business, which could drive a shift in the company's investment profile from value to growth [1][2] Group 3: Business Performance - JOYY's fundamentals are improving, with overseas live streaming business stabilizing quarter-on-quarter and overseas advertising business showing significant year-on-year growth [2] - As advertising business volume increases and profitability rebounds, JOYY is expected to undergo a valuation reassessment [2]

Summary of Earnings Preview for China Internet and Other Services Industry Overview - The report focuses on the China Internet and Other Services sector, particularly highlighting companies involved in gaming and entertainment, such as Damai Entertainment, 37 Interactive Entertainment, G-bits, Perfect World, IQIYI, JOYY, Huya, and Focus Media [2][10]. Key Company Insights Damai Entertainment (1060.HK) - Forecasted 27% YoY total revenue growth in 1HF26, driven by 90% growth in IP business and 13% growth in offline entertainment [3]. - Expected net profit growth of 45% YoY [3]. 37 Interactive Entertainment (002555.SZ) - Anticipated 14% YoY revenue growth and 30% YoY adjusted net profit growth, attributed to new game releases [4]. G-bits (603444.SS) - Forecast aligns with preliminary announcements, with a focus on deferred revenue and 2026 pipelines [4]. Perfect World (002624.SZ) - Expected 34% revenue growth with a shift from a net loss of Rmb189 in 3Q24 to a net profit of Rmb326 in 3Q25 [5]. IQIYI (IQ.O) - Total revenue expected to be largely flat QoQ (-7% YoY), with a forecasted non-GAAP operating loss of Rmb23 million [6]. - Membership revenue projected to increase by 3% QoQ [6]. JOYY (JOYY.O) - Total revenue expected to grow 6% QoQ (-4% YoY), with net income remaining flat [7]. - Focus on advertising revenue and expense control [7]. Huya (HUYA.N) - Anticipated total revenue rebound in 3Q25 with an 11% YoY increase and a narrowing net loss [7]. Focus Media (002027.SZ) - Forecasted revenue growth of 4% YoY, driven by stronger demand from internet advertisers [8]. - Expected net profit growth of 10% YoY [8]. Financial Metrics and Projections - **Damai Entertainment**: Total revenue projected at Rmb3,879 million for 1HF26, with a normalized net profit margin of 12.8% [14]. - **37IE**: Revenue expected at Rmb4,674 million for 3Q25, with a gross margin of 79% [15]. - **G-bits**: Revenue forecasted at Rmb1,631 million for 3Q25, with a gross margin of 92% [17]. - **Perfect World**: Revenue expected at Rmb1,766 million for 3Q25, with a gross margin of 65% [18]. - **IQIYI**: Total revenues projected at Rmb6,688 million for 3Q25, with a gross profit margin of 18% [20]. - **Huya**: Total revenues expected at USD 1,710 million for 3Q25, with a gross profit margin of 13% [21]. - **JOYY**: Total revenues projected at USD 537 million for 3Q25, with a gross margin of 36% [24]. Additional Insights - The report emphasizes the importance of management comments on revenue growth momentum and normalized margin levels across companies [3][4][5]. - The potential for upside surprises in revenue growth for several companies, particularly in the context of new game releases and advertising demand, is highlighted [12][13]. - The overall industry view remains attractive, with a focus on the evolving landscape and potential regulatory impacts [10]. This summary encapsulates the key points from the earnings preview, providing a comprehensive overview of the anticipated performance and strategic focus of the highlighted companies within the China Internet and Other Services sector.

Core Insights - Morgan Stanley has raised its target price for JOYY to US$62 from US$40, indicating improving fundamentals in JOYY's core business, accelerating advertising growth, and attractive shareholder returns [1] Business Performance - JOYY's live-streaming business may have bottomed out since 2Q25, with a reported 1% quarter-over-quarter growth and positive management comments on revenue growth, expecting further improvement in 2H25 and more growth in 2026-2027 [2] - The advertising business is projected to be the main growth driver in 2026-2027, with strong revenue momentum in the first half of 2025, following over 175% year-over-year growth in 2024. Forecasts include 26% year-over-year growth in 2H25 and 20% in 2026 [3] Shareholder Returns - JOYY has announced a three-year quarterly dividend policy totaling approximately US$600 million, along with a share repurchase program of up to US$300 million during 2025-2027. In 1H25, JOYY allocated US$135 million to dividends and share buybacks, with Morgan Stanley assuming US$300 million in annual investor returns [4]

Core Insights - BIGO Ads has successfully maintained compliance certification of the IAB Tech Lab Open Measurement SDK for five consecutive years, underscoring its leadership in transparency and standardization in the programmatic advertising industry [1][4]. Group 1: Compliance and Standards - The OM SDK, developed by IAB Tech Lab, serves as a unified standard for the global programmatic advertising industry, allowing third-party verification providers to collect key metrics such as ad viewability and impression measurement [2]. - The OM SDK adheres to Media Rating Council-approved methodologies, ensuring compliance with recognized industry standards for metrics like exposure rates and viewable pixel percentages [2]. Group 2: Advertising Environment and Efficiency - BIGO Ads is dedicated to creating a verifiable and reliable advertising environment, enabling advertisers to accurately identify genuine user traffic and achieve consistent cross-platform measurement [3]. - The OM SDK facilitates one-time integration with multi-party verification, enhancing technical efficiency by eliminating redundant SDK implementations [3]. Group 3: Financial Performance - In Q2 2025, BIGO Ads reported approximately 29% year-over-year revenue growth and 9% quarter-over-quarter growth, with a nearly 80% increase in traffic compared to the second half of 2024, indicating strong growth momentum [4]. Group 4: Global Presence and Industry Engagement - BIGO Ads is expanding its global presence and recently participated in DMEXCO 2025, Europe's largest digital marketing and programmatic advertising event, to share insights on programmatic advertising growth [5].

Core Viewpoint - JOYY Inc. (欢聚) has seen a significant increase in its stock price, reaching a new high since May 2021, driven by strong revenue growth in its non-live streaming business and overall positive financial performance in Q2 [1] Financial Performance - JOYY's Q2 revenue reached $508 million, reflecting a quarter-over-quarter growth of 2.7% [1] - Live streaming revenue was $375.4 million, with a quarter-over-quarter increase of 1.1% [1] - Non-live streaming business revenue grew by 25.6% year-over-year, contributing to 26.1% of total revenue, an increase of 7.4 percentage points year-over-year [1] Stock Performance - The stock closed at $62.04, up 3.62%, marking the highest closing price in over four years [1] - Pre-market trading showed a further increase to $62.66, up 1% [1] - The stock has a market capitalization of $3.187 billion [1]

Core Insights - JOYY Inc. (欢聚) experienced a nearly 5% increase in stock price, reaching $56.71 [1] - In Q2, the company's revenue reached $508 million, reflecting a quarter-over-quarter growth of 2.7% [1] - Live streaming revenue accounted for $375.4 million, with a quarter-over-quarter increase of 1.1% [1] - Non-live streaming business showed strong growth, with revenue increasing by 25.6% year-over-year, contributing 26.1% to total revenue, up 7.4 percentage points year-over-year [1] - Adjusted EBITDA for Q2 was $48.2 million, representing a year-over-year growth of 25.7% and a quarter-over-quarter growth of 19.3% [1] - Adjusted net profit reached $77 million, showing a year-over-year increase of 3.9% [1] - Operating cash flow remained robust at $57.6 million [1]

Core Viewpoint - JOYY Inc. reported a strong financial performance in Q2, with significant growth in both revenue and adjusted EBITDA, driven by robust advertising revenue and a solid contribution from non-live streaming business [1] Financial Performance - In Q2, JOYY's total revenue reached $508 million, representing a quarter-over-quarter increase of 2.7% [1] - Live streaming revenue was $375.4 million, showing a quarter-over-quarter growth of 1.1% [1] - Non-live streaming business revenue grew by 25.6% year-over-year, accounting for 26.1% of total revenue, an increase of 7.4 percentage points year-over-year [1] Profitability Metrics - Adjusted EBITDA for Q2 was $48.2 million, reflecting a year-over-year increase of 25.7% and a quarter-over-quarter increase of 19.3% [1] - Adjusted net profit reached $77 million, marking a year-over-year growth of 3.9% [1] - Operating cash flow was $57.6 million, indicating a stable financial position [1]

Group 1 - The core viewpoint of the article highlights JOYY Inc.'s (欢聚集团) Q2 2025 financial performance, showcasing a revenue of $508 million, with live streaming business showing positive growth and significant improvement in advertising revenue [1] - The company's BIGO segment generated $443 million in revenue, with BIGO live streaming revenue reaching $355 million, marking the first quarter of sequential growth after a strategic transformation [1] - The number of paying users for BIGO increased to 1.5 million in Q2 from 1.45 million in Q1, indicating a focus on high-quality user engagement [1] Group 2 - The advertising business has seen substantial growth, with a year-on-year increase exceeding 40% in the first half of the year, driven by multi-channel traffic access and continuous algorithm optimization [1] - Revenue projections for JOYY from 2025 to 2027 are estimated at $2.087 billion, $2.195 billion, and $2.303 billion respectively, reflecting a positive outlook for the company's financial performance [2] - The valuation multiple has been adjusted upwards to a PE of 14.1x for 2025, with a target price set at $71.9, up from the previous $60.1, due to an increase in comparable company valuation benchmarks [2]

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Insights - The company's Q2 2025 revenue reached $508 million, slightly above the expected $507 million, but down 10.2% year-over-year. Adjusted net profit was $77 million, exceeding the consensus estimate of $60 million [1][5] - The live streaming business showed a quarter-over-quarter recovery, while the advertising segment experienced significant growth, with a more than 40% increase in the programmatic advertising platform in the first half of the year [1][2] - The company plans to return $300 million to shareholders annually over the next three years [1] Revenue Performance - The BIGO segment generated $443 million in Q2 2025, down 12.7% year-over-year, with live streaming revenue at $355 million, down 19.1% year-over-year but up 1.1% quarter-over-quarter [2] - The core platform Bigo Live had a monthly active user count of 29.6 million, showing a quarter-over-quarter increase [2] - Non-live business revenue for BIGO was $87 million, up 28.9% year-over-year, driven by the growth of the programmatic advertising platform [2] Profitability and Forecast - The All Other segment reported revenue of $65 million in Q2 2025, up 12.6% year-over-year, with an adjusted operating loss of $24 million, a 40% reduction in losses year-over-year [3] - The company expects revenues for 2025-2027 to be $2.087 billion, $2.195 billion, and $2.303 billion respectively, with adjusted net profits projected at $265 million, $275 million, and $303 million [4][10] - The target price has been raised to $71.90 from $60.10, based on a revised PE ratio of 14.1x [4][10] Valuation Metrics - The company’s market capitalization is approximately $2.674 billion, with a closing price of $51.54 as of August 26, 2025 [6] - The average daily trading volume over the past six months is $20.58 million [6] - The stock has a 52-week price range of $31.64 to $55.27 [6]

Core Viewpoint - JOYY Inc. reported a strong financial performance in Q2 2025, with significant growth in both revenue and profit metrics, while also returning substantial value to shareholders through buybacks and dividends [1] Financial Performance - In Q2 2025, JOYY's revenue reached $508 million, representing a quarter-over-quarter increase of 2.7% [1] - Live streaming revenue was $375.4 million, showing a quarter-over-quarter growth of 1.1% [1] - Non-live streaming business revenue grew by 25.6% year-over-year, contributing to 26.1% of total revenue, an increase of 7.4 percentage points year-over-year [1] - Adjusted EBITDA for Q2 was $48.2 million, reflecting a year-over-year increase of 25.7% and a quarter-over-quarter increase of 19.3% [1] - Adjusted net profit for the quarter was $77 million, up 3.9% year-over-year [1] - Operating cash flow was $57.6 million, indicating stable financial health [1] Shareholder Returns - From January 1 to June 30, 2025, JOYY returned a total of $135 million to shareholders through buybacks and dividends [1]