China is the world’s largest telecommunications market. With the application of mobile Internet and ultra high-speed wireless technologies, live broadcast services have also developed rapidly. This phenomenon is caused by the tens of thousands of people moving from rural areas to cities. Promoted by megatrends, they watch many anchor live broadcasts, cooking and make-up every day.
The live broadcast service brought huge revenue growth to the two companies. When viewers present virtual gifts to their favorite anchors, they can be divided into revenues. Momo doubled its sales in 2017. Despite regulatory pressure and The risk of increased competition, but the vast majority of analysts recommend that investors buy these two stocks.
Dawid Krige, chief investment officer of US investment fund Cederberg Capital, said: 'Western investors are hardly blind to this.' Krick holds YY shares and operates the most in the past year. Good China Equity Fund. He said: 'Companies like YY can develop very good software in real time, which can guarantee compliance without affecting the user experience.'
The unlicensed street-lister in the United States initially cloned Tinder's product, but in the past two years, its stock price has tripled, and the YY stock price has only doubled in the same period. YY stocks surpassed Morgan Stanley in 2018 Performance of all other constituent stocks in the MSCI Asia Pacific Information Technology Index. However, the current price-to-earnings ratio of these two stocks is still far below the price-earnings ratio of other social media stocks and Nasdaq stock index. .
According to data compiled by Bloomberg, the price-earnings ratios of YY and Momo are only 0.7 times and 0.2 times, and the price-earnings ratio of Sina Weibo is 1.3 times. From the average of the future 12-month target price given by analysts, these two Only stocks have at least 20% upside.
Companies like Twitter have launched similar live broadcast services in the United States, but they are totally incomparable with China's live broadcast service. China's live broadcast service has tremendous growth potential. Tencent invested 462 million U.S. dollars in Tiger's live streaming, which is a growth of YY users. The main driving factors. Momo also longs for growth. It has acquired dating app probing to complement its streaming services.
However, China's live broadcast service is accompanied by unique risks. The most important one is that they face unprecedented competition. YY and Momo are currently the largest streaming media service providers in China. Since the threshold for entry into the streaming media industry is very low, they are now nationwide. Hundreds of streaming services have emerged.
Moreover, they cannot always maintain their position on the investor's wish list. Both YY and Momo enjoy scarcity value, because currently only they are purely streaming media applications, but this value is not permanent, because Other competitors may soon be on the market. It is said that Beijing’s Yingke Live will raise tens of billions of dollars before Hong Kong’s listing. Although Tencent owns a minority stake in YY’s Huya Live, it is said that it also competes with Huya’s live broadcast. The rival Betta invested 630 million U.S. dollars. Both live media streaming and headlines are currently worth more than US$10 billion in the valuation of the two media startups. Their number of monthly active users is more than YY and Momo.
Shawn Yang, executive director of Blue Lotus Capital Advisors, stated: 'The competitive landscape in 2018 will be very intense.' He is the only analyst who gives YY 'holds' ratings. Although he is on his own Management and strategy are confident, but he warns that indulging users with social media is an ongoing battle. He said: 'They will also find it difficult to attract a new generation of young people. Most young people Everyone went to bettas and quick hands. '
YY declined to comment on this, and the representative of Momo did not reply to the press request for comment.
Nomura Securities analyst Jia Long Shi said: 'Vigotine and private equity firms are very sensitive to supervision, so once new regulations come into effect, they will immediately stop providing funds for live broadcast companies. For companies that are not listed, This will be a heavy blow. But overall, the market is not yet fully aware of the growth potential of the two live companies, and their business and stock prices still have room for growth.'