Turning point? DouYu's stock price has tripled in 8 months.
The former leader of the live streaming industry$DouYu(DOYU.US) has entered a deep adjustment period in recent years due to policy changes, with its performance suffering a Waterloo and its stock price hitting rock bottom at the end of March this year.
Since early April, DouYu's stock price has seen a surge, with a cumulative increase of 302% so far. On December 2 (Monday) Eastern Time, its stock price rose sharply by 11.8% to close at $12.79 per share, reaching a new high since January 2022.
Has performance bottomed out?
DouYu recently released its Q3 report. While the year-on-year data still looks bleak, the quarter-on-quarter comparison finally shows a glimmer of hope.
In Q3 2024, DouYu achieved revenue of 1.0631 billion yuan (RMB, same below), a year-on-year decrease of 21.78%; net profit was 3.4 million yuan, a sharp drop of 95.54% year-on-year.
DouYu's quarter-on-quarter data for Q3 is much more impressive, entering a phase of stabilization and recovery. Its revenue had been declining quarter-on-quarter since Q3 2022, but in Q3 this year, revenue increased slightly by 3% quarter-on-quarter, marking the first quarter-on-quarter positive growth in eight consecutive quarters.
The net profit performance is even more striking. From Q4 last year to Q2 this year, DouYu incurred losses, but in Q3 this year, it managed to turn a profit.
In recent years, the government has imposed stricter regulatory requirements on live streaming content and streamer behavior. At the same time, the rise of short video platforms has been eroding the market share of live streaming platforms. Under the pressure of these two "mountains," the operational strategies and user engagement of live streaming platforms have been severely affected.
Against this backdrop, DouYu's user base has also been impacted.
At the end of September this year, DouYu's mobile monthly active users stood at 42.1 million, showing declines both year-on-year and quarter-on-quarter, with a quarter-on-quarter drop of about 2 million.
In terms of paying users, DouYu's paying users reached a peak of 7.9 million in Q3 2022 but have been declining since then, dropping to 3.4 million in Q3 this year. DouYu's paying users have remained at 3.4 million for three consecutive quarters, showing signs of stabilization, which is a key factor in the quarter-on-quarter revenue growth.
However, DouYu's competitors have performed better in terms of paying users. Huya's paying users reached 4.6 million in Q3 this year, a year-on-year increase of 9.5%, which the company attributed to growth in game-related service paying users.
Game streaming business remains sluggish, new businesses drive growth
DouYu's core business is still primarily game streaming, which forms its foundation. However, the current environment remains challenging for DouYu's streaming business.
According to Yuehu Data's estimates of the industry size, China's game streaming market remained at the hundred-billion-yuan level in 2023, but growth has slowed.
DouYu's streaming business in Q3 this year remains pessimistic. Despite ongoing reforms, streaming revenue has not stopped declining, dropping 34.7% year-on-year from 1.151 billion yuan in Q3 2023 to 752.1 million yuan in Q3 this year, and also showing a decline compared to 790 million yuan in Q2 this year.
Given the changes in the industry landscape and continued regulatory pressure, DouYu's game streaming business is unlikely to improve in the short term.
DouYu, of course, has not put all its eggs in one basket. In addition to game streaming, it has ventured into commercializing event content, game promotion and item sales, and advertising. In Q3 this year, DouYu's innovative businesses, advertising, and other revenue grew impressively to 311 million yuan, up 49.4% from 208 million yuan in the same period last year.
Mr. Cao Hao, Vice President of DouYu, stated in the earnings report, "In Q3 2024, we made solid progress in diversifying our revenue sources. This quarter, revenue from innovative businesses, advertising, and other sources grew to 311 million yuan, accounting for 29.3% of our total revenue, a significant improvement from 15.3% in Q3 2023."
However, it should also be noted that the scale of DouYu's innovative businesses, advertising, and other revenue is not large. In today's internet industry, where growth pressure is widespread, whether DouYu can return to the growth track through diversification remains to be seen.
Author: Yao Yuan
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