Investment Rating - The report gives a "Buy" rating for the company with a target price of HKD 14.5, compared to the current price of HKD 10.54 [4][6]. Core Insights - The company, Chi Zi Cheng Technology, is a leading global social entertainment platform from China, focusing on diverse social experiences for users from various cultural backgrounds, primarily in the Middle East and North Africa [1][15]. - The company has achieved significant revenue growth, with a 40% year-on-year increase in revenue for the first half of 2025, reaching RMB 3.181 billion, and a net profit of RMB 489 million, corresponding to a net profit margin of 15.4% [1][25]. Summary by Sections Company Overview - Chi Zi Cheng Technology has transitioned from a tool-based application to a diversified social product matrix, focusing on global social entertainment [15][16]. - The company has established a strong localized operational team with around 800 members across more than 20 countries, implementing a "China-led, local-driven" collaborative model [2][19]. Social Business Strategy - The company's core social business, which is expected to account for over 70% of total revenue by 2024, employs a "bush" product matrix strategy, including products like MICO, YoHo, TopTop, and SUGO [2][35]. - The company has successfully integrated acquisitions, such as Blue City Brothers, to enhance its presence in the diverse social market, with Blue City's MAU reaching approximately 7.45 million [2][3]. Innovative Business Growth - The company is developing a second growth curve through innovative businesses, including premium mobile games and social e-commerce, with the flagship game "Alice's Dream: MergeGames" showing over 60% revenue growth in 2024 [3][4]. - The social e-commerce segment is expanding, with acquisitions enhancing user demographics and engagement [3][4]. Financial Forecast and Valuation - The company is projected to achieve revenues of RMB 69.0 billion, 84.1 billion, and 97.0 billion for the years 2025, 2026, and 2027, respectively, with net profits of RMB 9.5 billion, 12.4 billion, and 14.9 billion, reflecting growth rates of 97.0%, 31.3%, and 19.7% [4][5]. - The report highlights the company's strong localization strategy and successful "product + country" replication strategy, positioning it well in emerging social entertainment markets [4][5].

Core Viewpoint - JOYY Inc. reported a 12.4% year-over-year decline in revenue for Q1 2025, primarily due to a significant drop in live streaming business revenue, which decreased over 20% compared to the same period last year [1][4] Group 1: Financial Performance - Q1 2025 revenue was $494 million, with live streaming revenue at $371 million [1] - Non-live revenue reached $123 million, showing a 25.3% year-over-year increase [1][4] - The sale of YY Live to Baidu for approximately $2.1 billion resulted in a confirmed gain of about $1.876 billion, contributing to a net profit of $1.92 billion for shareholders [1][6] Group 2: User Metrics - BIGO's paid user count decreased by 13.2% to 1.45 million, with average revenue per paying user (ARPPU) dropping by 5.8% to $221.6 [2] - BIGO Live's average monthly active users fell to 28.9 million from 37.1 million year-over-year [2] Group 3: Strategic Shift - The company is focusing on diversifying its revenue sources by emphasizing non-live business as a second growth engine [4][5] - Non-live revenue growth is primarily driven by advertising, particularly from BIGO Ads, which saw a 27.3% increase to $80.26 million [4] Group 4: Market Challenges - The live streaming sector faces intensified competition and changing user preferences, compounded by a challenging global economic environment [4][5] - The domestic market is pressured by leading platforms like Douyin and Kuaishou, while international competition from TikTok and Kwai is increasing customer acquisition costs [5] Group 5: Acquisition Context - The acquisition of YY Live by Baidu, initially valued at $3.6 billion, was completed at a significantly reduced price of $2.1 billion, reflecting a 40% discount [6][7] - The acquisition faced delays due to allegations of fraud against JOYY, which were later disproven, but the incident impacted the company's reputation [7] Group 6: Long-term Outlook - The sale of YY Live is seen as a strategic move to concentrate resources on more promising overseas markets and non-live business areas, enhancing financial stability and risk management [7]

Group 1 - The core viewpoint of the news is that Guangzhou Huaduo Network Technology Co., Ltd. (Joyy Inc.) reported strong financial performance in Q1 2025, with significant revenue growth and profitability, indicating a robust development trend [1][2] - In Q1 2025, the company's revenue reached $494.4 million, with GAAP and non-GAAP operating profits of $12.2 million and $31 million, reflecting year-on-year growth of 244.5% and 24.9% respectively [1] - The company returned value to shareholders by distributing $49.1 million in dividends and repurchasing approximately $22.5 million in stock from January 1 to May 23, 2025 [1] Group 2 - The live streaming segment generated $371.3 million in revenue, with BIGO Live contributing $351.6 million, and the average viewing time per user for BigoLive increased by approximately 4% quarter-on-quarter [2] - Non-live revenue reached $123 million in Q1 2025, marking a year-on-year growth of 25.3% and accounting for 24.9% of total revenue, with BIGOAds advertising business growing by about 27% [2][3] - The company is leveraging AI to enhance advertising effectiveness, which has led to a continuous increase in both advertisers and developers, driving the rapid growth of the BIGOAds platform [3]

Core Viewpoint - The article discusses the challenges faced by Huya, Douyu, and JOYY (formerly YY) in the post-live streaming era, highlighting JOYY's attempts to pivot towards international markets and diversify its revenue streams amidst declining user engagement and profitability concerns [1][10][18]. Financial Performance - JOYY reported a total revenue of $2.24 billion for 2024, a slight decrease of 1.3% year-on-year [3]. - The company recorded a net loss of $146 million under GAAP, primarily due to asset revaluation after the divestiture of YY Live and a non-cash goodwill impairment of $455 million [3]. - On a Non-GAAP basis, JOYY achieved a net profit of $298.5 million, marking a 2% increase year-on-year, indicating the core business's ability to generate cash flow [3]. Revenue Structure - The core BIGO segment contributed 88% of total revenue, growing by 3.3% year-on-year to $1.99 billion, serving as a stabilizing factor for the company's performance [4]. - Non-live revenue saw significant growth, increasing by 55.9% to $449.8 million, rising from 12.7% to 20.1% of total revenue, indicating a successful shift in strategy [5]. User Engagement Challenges - Despite the growth in non-live revenue, user attrition remains a significant concern, with average monthly active users (MAUs) for BigoLive, Likee, and Hago showing a downward trend [6]. - The total number of paying users decreased to 1.54 million, with ARPPU (average revenue per paying user) declining by approximately 5% to $237.1 [6]. Strategic Shifts - JOYY is focusing on international markets, with nearly 90% of its revenue coming from outside mainland China, and revenue from developed countries growing by 24.6% to account for 53.9% of total revenue [11]. - The company aims to enhance its advertising platform, expecting strong double-digit growth in this segment by 2025 [11]. Market Competition and Regulatory Environment - The competitive landscape is intensifying with the rise of platforms like TikTok, which is merging short video and live streaming, leading to increased competition for user attention [12][18]. - JOYY faces regulatory challenges, as evidenced by the temporary removal of BigoLive from app stores, which negatively impacted its fourth-quarter live streaming revenue by 13% [7][8]. Technological Integration - The integration of AI technologies is seen as a potential driver for growth, with JOYY investing in advanced content moderation and user verification systems to enhance operational efficiency [16][17]. - The CEO emphasized the importance of leveraging AI to improve community experiences and operational precision [17]. Conclusion - JOYY's journey in the post-live streaming era reflects a typical transformation phase, characterized by resilience in Non-GAAP profits and challenges in user retention and GAAP losses [18]. - The company's future growth will depend on successfully balancing diversification and globalization strategies while navigating the evolving competitive landscape [18].