On March 16, 2022, video social media company Huanju Group released its financial results for the fourth quarter and full year of 2021. According to the data, Huanju's revenue in 2021 increased by 36.5% year-on-year to $2.619 billion, excluding the divested YY live broadcasting business, and for the first time under non-GAAP, it achieved an adjusted net profit of $109 million, compared with a net loss of $164 million in the same period last year. Fourth-quarter revenue increased 16.8% year-over-year to $664 million, with adjusted net profit of $98.3 million, compared to a net loss of $22.4 million for the year-ago quarter.
The main reason for The Group's turnaround in the fourth quarter and full year was that its BIGO platform was profitable on a non-GAAP basis since the first quarter of 2021. According to the management of Huanju, looking forward to 2022, Huanju will continue to deepen localization and cultivate the global diversified social entertainment ecology. In addition, net income for the first quarter of 2022 is expected to be between $601 million and $616 million.
The overseas business segment BIGO has become an engine for increasing revenue
Revenue accounted for more than 80% in the fourth consecutive quarter
Founded in 2005, Huanju was listed on the NASDAQ in 2012 at an issue price of $10.50 per share, with a market capitalization of approximately $560 million at the time. In February 2021, Huanju's stock price rose to an all-time high of $146.84, while as of press time, Huanju reported $25.41 per share, down 82.7% from its highest point in more than a year, and the current total market value is $1.981 billion.
Overall, the current product ecology of Huanju is mainly composed of live broadcast product BIGO Live, short video application Likee, video social application imo and game social application Hago, focusing on "short video + live social".
Looking back at 2020, Huanju sold Huya Live to Tencent for $226.2 million, and YY Live to Baidu for $3.6 billion in the same year. After the sale of YY Live and Huya Live, BIGO, the overseas business segment, became the core and largest source of revenue.
According to the 2021 financial report, THE FULL-YEAR REVENUE OF BIGO, THE OVERSEAS BUSINESS SEGMENT, INCREASED BY 34.1% YEAR-ON-YEAR TO US$2.32 BILLION, AND THE ADJUSTED ANNUAL NET PROFIT WAS US$182 MILLION.
From the perspective of the four quarters of 2021, the revenue of Huanju was 643 million US dollars, 662 million US dollars, 651 million US dollars and 664 US dollars, of which THE REVENUE OF BIGO was 581 million US dollars, 598 million US dollars, 569 million US dollars and 576 million US dollars, accounting for 90.36%, 90.33%, 87.40% and 86.75% respectively, accounting for more than 80% in the fourth consecutive quarter. In contrast, before the divestiture of Huya Live and YY Live Broadcasting business, the BIGO business accounted for about 20% of revenue in early 2020.
The global monthly activity is declining as a hidden worry
But paid users increased year-on-year
Combined with the financial report data of previous years, the average number of active users in the world was 490 million in 2019, 390 million in 2020, and 280 million in 2021, showing a downward trend. In the four quarters of 2021, The global average mobile monthly active users of Huanju also continued to decline. During the period, India banned some Chinese apps, and the reduction in advertising expenditure was the influencing factor.
Among the major products, from the average number of monthly active mobile users in the fourth quarter of 2021, BIGO Live increased by 11.9% year-on-year to 32.2 million, Likee decreased by 44.2% year-on-year to 67 million, and Hago decreased by 42.8% year-on-year to 9.5 million.
Although monthly activity declined, paying users increased year-on-year, mainly from the BIGO business segment. The data shows that the total number of BIGO paying users increased by 2.5% year-on-year to 1.51 million in the fourth quarter, and the average revenue per paying user increased from $285.9 in the previous year to $320.2.
Among them, BIGO Live's paid users in the fourth quarter increased by 10.3% year-on-year, Revenue in Europe increased by 42.2% year-on-year, and paid users increased by 14.7% year-on-year; Revenue in Southeast Asia and other emerging markets increased by 16.6% year-on-year, and paid users increased by 24.4% year-on-year. Huanju management said that in 2022, BIGO Live will continue to take the path of balanced development of globalization and multi-market, focusing on expanding key regions such as North America, Europe, Japan, South Korea, Australia and New Zealand, and the Middle East, and accelerating investment in emerging markets.
The globalization strategy continues
The road to sea is both dangerous and opportunistic
After the divestiture of domestic leading businesses such as Huya Live and YY Live, after more than a year of adjustment, Huanju has now focused on overseas and become a member of the Internet overseas enterprises, which also means facing geopolitical risks and the challenges of global industry competition.
According to Sensor Tower data, global mobile app revenue in the first half of 2021 was $64.9 billion, up 24.8% year-on-year, and global consumer spending on entertainment apps reached $4.59 billion, up 55.8% year-on-year, about twice the growth rate before the epidemic, with short video, live streaming and comics performing even stronger.
Focusing on Chinese overseas manufacturers, App Annie released a list of Chinese non-game manufacturers' overseas revenue in early 2022, showing that Huanju's revenue ranks in the top three in the sea, ranking behind bytes. Among them, Likee under Huanju is a short video application, which is also a short video going to sea, and also has the meaning of benchmarking TikTok.
It is worth noting that in early 2021, the Indian government announced that it would upgrade the ban on 59 Chinese apps under Huanju's BIGO Live, Likee, and Hago to "permanent", which would have a certain impact on Huanju's way to the sea. After the Indian market was blocked, BIGO Live continued to expand its investment in emerging markets such as Europe and Southeast Asia, and the full year 2021 performance was acceptable, but in the case of reduced ad placements in Likee and Hago, the monthly active mobile users of Likee and Hago in the fourth quarter of 2021 were poor.
Huanju's overseas mode is localized operation, including team localization and ecological localization, according to huanju management, in the future, relying on the support of the global localization operation team, huanju will continue to create a global diversified social entertainment ecology through in-depth localization, and constantly develop and consolidate the market position of huanju in the core area.
Li Xueling, Chairman and CEO of Huanju, said: "We adhere to the implementation of our globalization strategy and continue to be committed to creating a diversified social entertainment ecosystem. Looking forward to 2022, as Huanju's global business enters a positive cycle, on the basis of healthy cash flow and a steady growth model, Huanju will continue to explore and explore the global market and further expand the market share of social entertainment products in the global market. ”
Producer: Nandu Big Data Research Institute
Written by: Lin Xinxin
![When the transaction was pending, Baidu replaced the head of YY live broadcasting, and vice president He Junjie took over the baton[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)