Hello (US:MOMO)2021-06-08 18:41Financial Performance - Total revenue for Q1 2021 was CNY 3.47 billion, down 3% year-over-year due to a decrease in live streaming revenue, but the decline rate has narrowed compared to previous quarters [8][39] - Adjusted net income for the quarter was CNY 634 million, representing an 18% profit margin, while adjusted net income for core Momo was CNY 676 million, or a 23% profit margin [8] - Tantan's total revenue was CNY 568 million for Q1, up 49% year-over-year, with an adjusted net loss of CNY 42.04 million [9][31] Business Line Performance - Core Momo had 115.3 million monthly active users (MAU) in Q1, up 7% year-on-year, with significant growth in user interactions and retention metrics [9][10] - The number of paying users for core Momo was 9.1 million, with a net addition of 100,000 from the previous quarter [11] - Tantan's paying user count decreased to 3.5 million, down from 3.8 million, due to weak DAU performance and changes in user demographics [15] Market Data - The VAS (Value-Added Services) business grew 42% year-over-year, driven by chat room experiences, which contributed significantly to revenue [25][41] - Live broadcasting revenue for core Momo was CNY 1.71 billion, down 26% year-over-year, while Tantan's live streaming revenue dropped 38% sequentially to CNY 251 million [40][32] Company Strategy and Industry Competition - The company aims to grow the core user base with limited marketing budget and improve ROI, while Tantan focuses on solid user growth through improved marketing efficiency [16][33] - The management emphasizes a sustainable growth model for live broadcasting, avoiding aggressive revenue-oriented operational efforts [20] - Tantan's management change is expected to enhance product and marketing effectiveness, with a focus on improving user experience and addressing past inefficiencies [30][35] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in Tantan's growth potential, targeting a user base increase of 20% to 35% in the coming months [53] - The company anticipates a revenue decline in Tantan for the second quarter due to temporary disruptions but expects user growth to drive revenue recovery in the second half [55][59] - Core Momo's revenue performance has exceeded expectations, with a positive outlook for the second half of the year [62] Other Important Information - The company has repatriated RMB 1.3 billion from its offshore entity to replenish U.S. dollar funding, incurring a 10% withholding tax [49] - The company plans to disclose Tantan's user data later this year to provide investors with more reliable metrics [54] Q&A Session Summary Question: What are the strategies for Tantan's user and revenue trends after the management change? - Management has identified several issues in Tantan's user acquisition and is confident that addressing these will lead to significant user growth, targeting a 20% to 35% increase [53][54] Question: What is the outlook for core Momo's live streaming in the second half? - Management believes that core Momo's live streaming business is on a stable recovery trend, with a focus on maintaining a healthy content ecosystem and effective incentive programs [62]