On March 19th, Huanju Group (NASDAQ: YY) released its financial reports for the fourth quarter and full year of 2023. In the fourth quarter of 2023, Huanju Group achieved a revenue of 570 million US dollars, a year-on-year decrease of about 5.8%, and an adjusted net profit of 64.2 million US dollars, a year-on-year increase of 28.4%.
In 2023, the total revenue of Huanju Group was 2.27 billion US dollars, a year-on-year decrease of about 6%. The adjusted net profit was 290 million US dollars, a year-on-year increase of about 46.8%.
Regarding the company's performance over the past year, Li Xueling, Chairman and CEO of Huanju Group, stated, "2023 is a year of progress. Through continuous product improvement and flexible operational strategies, the company's global monthly active users have resumed year-on-year growth for three consecutive quarters. At the same time, through unremitting optimization of operational efficiency, the company's profitability has been strengthened for the third consecutive year."
Taking the fourth quarter as an example, although Huanju Group's overall revenue decreased by 5.8% year-on-year, its revenue cost and operating expenses also decreased by 6.2% and 13.8% year-on-year, respectively, which also led to a year-on-year turnaround in its operating revenue and profit margin.
In terms of users, in 2023, the global average monthly active mobile users of Huanju Group were 275 million, a year-on-year increase of 2.6%.
The BIGO sector has become a business pillar
At present, the BIGO segment (including Bigo Live, Likee, and imo) has become the most core business of Huanju Group, and its revenue share has been continuously increasing in recent quarters.
According to financial reports, the paid users of the BIGO sector reached 1.67 million in 2023, a year-on-year increase of 7.9%. In 2023, the annual revenue of the BIGO sector was 1.92 billion US dollars, a year-on-year increase of 3.1%, accounting for 84.6% of the total revenue. In the fourth quarter, the revenue of the BIGO sector was 491 million US dollars, accounting for 86.2% of the total revenue. In terms of profitability, the operating profit of the BIGO sector in 2023 was 288 million US dollars, with an operating interest rate of 15%.
In the BIGO sector, Bigo Live is currently the fastest-growing business for Huanju. In the fourth quarter of 2023, while the user base of other products was shrinking, the average monthly active mobile users of Bigo Live increased by 4.5% year-on-year to 38.4 million.
According to the 2024 Mobile Market Report released by data.ai, Bigo Live remains the second largest global social media platform in terms of consumer spending in 2023. Among 29 countries and regions covering the Americas, Europe, the Middle East, Asia Pacific, and other regions, Bigo Live ranks in the top five out of 18 countries and regions, and in the top ten out of 7 countries and regions.
YY Live Latest Progress
On January 1st of this year, Baidu released an announcement that brought another twist to a transaction that had long been perceived as settled by the outside world.
Baidu announced that its affiliated company Moon SPV Limited terminated the Share Purchase Agreement entered into by Moon SPV Limited, Baidu (Hong Kong) Limited, JOYY Inc., and other related parties on November 16, 2020, as amended or supplemented in the future, through the exercise of contractual rights.
Baidu stated that according to the previously signed Share Purchase Agreement, Baidu (Hong Kong) Limited agreed to purchase from JOYY and JOYY agreed to sell JOYY's domestic video entertainment live streaming business (YY Live) in China to Baidu (Hong Kong) Limited. However, the share purchase agreement stipulates that the delivery of the proposed acquisition must meet certain prerequisites, including obtaining necessary government regulatory approvals and other conditions, and if the proposed acquisition is not delivered before the final deadline, both the buyer and seller have the right to terminate the share purchase agreement.
As of December 31, 2023, which is the final deadline, all the delivery prerequisites stipulated in the share purchase agreement have not been fully met. Therefore, Baidu stated that Moon will seek to negotiate with Huanju Group on the future arrangements of the transaction after terminating the equity acquisition agreement and explore reasonable solutions.
In its financial report, Huanju Group also disclosed the latest progress of the transaction. Huanju Group stated that the company is discussing with Baidu the next steps after terminating the share purchase agreement. Meanwhile, the company is also seeking legal advice and will consider all available options based on Baidu's written notice.
Huanju also emphasized that from January 1, 2024 to the date of financial report release, it has not yet obtained control of YY Live and has not merged with YY Live.
As of the closing of the US stock market on March 18th, the stock price of Huanju Group was $33.37 per share, with a total market value of approximately $2 billion. As of December 31, 2023, Huanju had cash and cash equivalents, restricted cash and cash equivalents, short-term deposits, restricted short-term deposits, and short-term investments of $3.69 billion.