After encountering regulatory resistance in the last quarter, the exploration of its products led to a significant decline in active users and paying users, and the market value in September shrank by $ 1.2 billion. With the re-launch of the company’s mobile app APP Momo and Tantan, the number of active users and paying users will rebound significantly, and Momo is expected to return to a high growth trend.
Momo announced the third quarter financial report before the market on Tuesday. The main indicators of revenue and number of paid users exceeded market expectations. Net profit increased significantly year-on-year. The live broadcast business maintained growth flexibility under regulatory pressure.
After encountering regulatory resistance in the last quarter, the detection of its products has led to a significant decline in active users and paying users, and the market value in September shrank by US $ 1.2 billion. With the re-launch of the company’s mobile app APP Momo and Tantan, the number of active users and paying users will rebound significantly, and Momo is expected to return to a high growth trend.
Active users hold steady, revenue growth continues to decline
In 2019, under the dual test of macro tension and domestic regulatory pressure, Momo’s revenue growth continued to decline. In this quarter, Momo’s revenue was US $ 4.45 billion, a year-on-year increase of 22%; monthly active users were 114.1 million, compared with 110.5 million in the same period last year.
Momo’s revenue still mainly depends on live broadcast. It has contributed an average of 75% of revenue in the past four quarters. The total number of paid users in the quarter reached 13.4 million. The live broadcast business was driven by paid users and ARPPU. Increased by 18%. The upgrade of the aristocratic system of paying users and interactive gameplay between live broadcasts greatly promoted the willingness of paying users to pay.
The Tiger Investment Research team believes that it is worth noting that the slowdown in the growth rate of the live broadcast business, which accounts for a relatively high proportion, has directly led to the slowdown in overall revenue growth, but after the revenue reached a certain volume, this slowdown is acceptable.
It will take time to explore and become a new profit growth point
After the live broadcast business becomes stable, Momo is digging for new profit growth points. After the acquisition of exploration, value-added service revenue quickly developed, and its proportion of revenue gradually increased, gradually becoming a new growth engine. Exploring paid users reached 4.5 million this quarterIt was 3.6 million last year, and the number of payers has increased significantly.
According to App Annie’s data, the download ranking of SNS in SNS social applications has returned to the forefront in this quarter, and the ranking in India, a major overseas market, is relatively stable. After re-launching, the probe is still popular among users.
However, this quarter’s financial report shows that under Non-GAAP, the company’s overall net profit in the third quarter was 1.0849 billion yuan, the net profit of Momo App was 1.247 billion yuan, and the net loss of exploration was 159.5 million yuan. In the same period of the year, the net loss was 132 million yuan. The Tiger Securities investment research team believes that it can be seen that the loss of exploration is still increasing, and the expenditure of exploration activities and overseas marketing costs are also dragging down the overall profit level.
Earlier, the company ’s management made it clear that in the next two or three years, Tantan will become the company ’s new growth engine. From the current point of view, the liquidation efficiency of exploration is far less than that of Momo. At the same time, the design of exploration is gradually skewed towards men. Men’s consumption ability is not as good as that of women.
Summary
This financial report shows that Momo is still in a period of rising performance, although the wide fluctuations in share prices this quarter indicate that investors are worried about increased competition in the industry and the uncertainty of the regulatory environment. However, as one of the largest social platforms in China, Momo has a user base of more than 100 million and excellent monetization ability. Momo, which is based on “social + entertainment”, is back to its normal development track.
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