Q4 2020 Douyu International Holdings Ltd Earnings Call
participants
Are in listen-only mode will be hosting a question-and-answer session after Management's prepared remarks. I will now turn the call over to the first Speaker today Miss Mal Mal vice president of capital markets of do you please go ahead ma'am?
Thank you. Hello, everyone. Welcome to our fourth quarter and full-year 2020 Journey.
Joining us. Today is the Shelby Ahn chairman and chief executive officer Mister Chief strategy officer and meet the household, but the person dead you can refer to order and for year 2020 Financial results on our website and you can also check a reply of this for life becomes available in a few hours on our our side.
before we start this call may contain bull semen to the safe harbor provision for the private Securities litigation Reform Act of 1995. Baseball Management's current location and of the vision that involve known and unknown risks and uncertainties and other factors off and do the companies control which may cause actually loud Bolen or achievements of the company to be materially different from results performance or a patient's employee said he seemed
And details of the company's filing with the SEC, and it takes no duty to revise or update any forward-looking statements or selected event or the consensus after the date of this conference call. I will now speak on behalf of our children and co-author of twenty-twenty those our financial and operating results maintains their steady growth momentum as we total our total revenue went up by 10% year over here to reach RMB 2.27 billion in the. At the same time our average wage increase by 6.9% year-over-year to 68.2 million and our quarterly pay users extended by 4.6% giving birth.
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the residual impact of COVID-19 persists throughout the macro-environment concentrix light continues to flourish and attract additional box is in the period in the fourth quarter of 2020 our total average and we used grew by 5.2% year-over-year to 174 million month. The Chelsea extension with many factors things on skill or parliaments including League of Legend Steven hand and walk along with the rising popularity of ourselves organized, including pubg gold Grand tournament season 11 and Peacekeeper go program continues to fuel our user base extension.
Multiple you titles including Call of Duty mobile. 9.0 more like Place mobile and dnf photo page, which I will pass and confident and attractive user through our index corporations with game developers such as peace keeper of keys and legal page on the joint oppression of women and requirements of platform Corporation for different games helps to cultivate and increasing engaging and active environment.
I will address diverse communities and provide a wider band of constant viewing options through our video segments service to be better off. Just fine. Actual users demand.
Update during the quarter. We remain committed to the managing partner industry leadership during the growth of our games and tricks life in business spending the depth and breadth of offerings across all segments not content to maintaining the sales calls. We also launched version 7.0 our community which we have established our video content and further refine our community documents to develop an integrated system along the install that a change in the fourth quarter our efforts to sponsor high-quality his fourteen deliver exceptional results.
Usually have continued to occupy a key role in the industry. And therefore we have continued to invest in the middle name is l l t t s 1 Cup Championship and our self-developed all of Kingdoms YG off the team to leak or 2020 Championship. We were pleased to see our operating team deliver first performances and believe that such address will continue to call a supercharged. I will read influence and compose our different Agency for advantages go involved.
Young kids. We also continue to take our tournament broadcasting and self-produced events to the next level and such during the quarter or game developer commission. Well reaching more than 90. Skill esport women's in home and a featuring the 2020 League of Legends World Championship king of products was close to our close collaboration with the profile mobile team during the profile mobile weeks. We develop a joint membership system, which has a more creative way to cross reference our self-produced Peacekeeper. KO friend told them even one proved to be so popular that is became one of the most widely anticipated and curling his own pace peacekeepers women's in December.
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Pln pnb team to compete they were were brought to the edge of the seat during the one-of-a-kind importantly Thursday. We still produce more than 15, which enabled us to establish a solid foundation for future growth in this area and we plan to organize more tournaments than how about in terms of content operations strategy. We plan to continue building our community and the video business on top of solid gains live streaming information.
Will you are Drive parallel business and built and integrated ecosystem for live streaming? We remain focused on developing a broadcasting class is for Content which will include both partners and self-produced esport tournaments and programs for videos. We have already completed the initial state of infrastructure development and experimented with multiple quality going forward. We plan to engage with more quality Chef won't be the account and creators in order to further enrich and expand our library of video offerings.
For our community plan to further amplify users discoveries introduction and discussion through the cultivation of more interest groups based off repeatedly.
No attention during the colder as we continue to refine almond efficient products and introduce more Pace Mario's to enhance our using a user-pay experience. We increase our quality users bifocal difference and year to 7.6 million and grew up a ratio to 4.4% off who they also increase by 4.6% year-on-year to arm be 273 local has we plan to continue rolling out more Innovative initiatives and event to leave a large our page user base furthermore. We remain committed to the ongoing exploration of innovative solution. And as well as each segment of our content operation,
Switch accurate will help to augment our platform operating efficiency and boost immunization efficiency of our content and emergency room.
We also continue to make good progress on on different as a result of collaboration with tencent example, we became one of the first cousin platform to use the video streaming follicle SRT mobile application in politics. This technology is Mabel streamers to live stream smoothly regardless of weeks off work environments waiting package loss of up to 40% and have not significantly expanded the range of live streaming scenarios available to users on our platform with the support of the new technology. Our outdoor are able to diversify the accountants live streaming and deliver a high-quality bring in the box that is not connection.
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The Japanese market and product continue to benefit from the inroads. We are making in Japan our ongoing investments in the platform and our fax machine in the scale actually space as a result mildom has continued to perform well maintaining a clean position in Japan.
Is the Marines during the week our operational and financial performance at a healthy Pace going forward to leverage our position in life streaming to further develop and refine and integrated ecosystem more out of the three core businesses live streaming video and Community down to advanced advanced advanced our platform capabilities and financial performance. We will continue to implement initiative in several areas including product management and operation which address will not only help to fill our long-term business, but we're also serve to unlock additional value and Industry change while providing our shareholders with nothing valuable with that are now to record our second president of birth.
It's a hotel to go through the details of financial performance in the fourth quarter.
Thank you, Mama. Hello, everyone.
Or click the rapide use in the first quarter of 2020 increased by 10% year-over-year to R&B 2.27. While for the revenue in the 4th of 2020 increased by 31.8% every year to R&B 9.6. Additionally in the full year of 2020, but just need the income was R&B 541.6 million and adjusted margin reached 5.6% Unless increase approximately 88 basis points from prior.
Total revenues in the first quarter of 2019 increased by 10% every year to RMB 2.27 billion with 91 plus 50% of total revenues generated from live streaming and the remaining portion generated from rising and others.
Let's do mere Avenues in the first quarter of 2020 increased by 9.4% to arm the 2.0 7. From R&B 1.8 competed in the same period of 2019. This increase was primarily attributable to our platforms improved user paying experience which continues to be driven. Well, I'm going product requirements efforts as well as stimulation of user-pay habits resulting from our home application of careful pains Narrows the result paying users in the first quarter of preventing increased to 7.6 million from 7.3 million in the same period of 2019.
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The diversification of accountant ecosystem help to improve the monetization efficiency of those game and non-game segments or platform PE massage increased R&B 273 in the first quarter of 10:20 from R&B 261 same period of last year advertising and other revenues increased by 16.5% year-over-year to R&B 198 on a manager isn't my outstanding French influence and the corresponding increase in advertising amount for comparative advertising and promotion solution.
Authorizing the fourth quarter of 2020 increased by 23.7% R&B 2.5 billion from R&B 1.6 billion in the same period of 2019.
Ma specifically Revolution fees and cost increased by 25.6% to 1.85 month which could generally be explained by Falling driver's first content cost increased as a week invested more in-depth testing price for each first tournaments and the in-house production of proprietary events to the further enrich content of platform second our Revenue sharing a space increased. We was in line with our total revenue groups, sir. We continue to invest party streamers in the overseas Market.
In the first quarter of 2020 increased by 12.7% to RMB 117.7 mi from our box 151 point four million in the same period of 2019. This was mainly due to our into the introduction of more high-quality living wage such as fourteen high definition live streaming content, which providing users with better billing experiences and further size font users wage demands.
Profit in the first quarter of 2020 was R&B 182 point to me compared with R&B 375,000 in the same period of last year was Martin in the first quarter of 2020 was 8% compared with 18.2% in the same. 2019. The theater is in gross margin was mainly due to the increase in Revenue sharing fees and cutting costs as a percentage of our total revenues.
Those are the marketing expenses in the fourth quarter of 2020 increased by 27.3% R&B 117,000 point seven million from 134.1 million in the same period of 2019 married reason for the increase in the promotional activities a peacefood immense as well as the increase in prices for self-produced events.
Research and development expenses in the first quarter of 2020 increased by 18.6% to RMB 118.96 MB 100.2 million in the same period of 2019. This increase was primarily due to our development and Improvement of Home Video related Technologies as well as application upgrades.
General and administrative expenses in the first quarter of 20 increased by 54% R&B 100 + 17 + 7 million month from R&B 76.4 million in the same. 2019 mainly due to the increase in professional service fees related to our potential murderer with Huna.
Just the operating loss in the first quarter of 2020 which exclude share-based compensation expenses was Farm be 199 Point 1 million wage compared to the adjustable credit. Income of R&B 141 point was made in the same period of 2019 little lost in the first corner of consenting was Army 228.7 million compared to net income of R&B 157.5 meeting in the same period of last year.
Justin that lost in the first quarter of 2020 which excludes Chavez conversation expenses Chef laws enacted method Investments. I mean, the loss of Investments was Army 176.9 million.
compared to a net income of 186.4 in the same period of 2019
tiny 20 basic and diluted were armed point six one and R&B Point, press nine respectively in a while. I guess he basic and diluted net loss. But at the end were on be .45 and R&B .45 respectable.
For we will continue to explore our monetization the Pepsi and efficiency. We will also further utilize our operating leverage off while staying transport to the state sustainable development of our platforms. This concludes our prepared remarks for the dates. We are now ready questions. Thank you. Once again, the question and answer session to ask you a question me, press the star then one on your touchtone phone for using a speaker phone. Please pick up your handset before pressing the keys to withdraw your question, please press * then two. If you asked a question a mandarin, please repeat it in English. The first question comes from a song from Bank of America, please go ahead.
Hi Bonnie. This is dead and paste account for the box office management or my question regarding the merger deal with who do it to your timeline to complete the deal. This year second delay regarding the Anti-Flag regulation of about the Internet space to see any impact to our memorabilia. Thank you.
Okay, I can get my upgrade screen and currently the potential merger between and is still on track our teams with the party life. I know working around the clock but the exact timing of the clothing also depends on the upper ball protest by the SEC and the relevant domestic regulator long as it's on sir. We are not able to share the closing date for now and for your second question as we know authorities have a gradually improve the industry policies and regulations the following the Rampage of the internet industry over the past few years. We can see that The Regulators have issued revised anti truster guidelines with the global promoting for tables under Fair competition among internet industry participation.
So are these the guy that I have a Level Playing Field across the industry, which will also support so is long-term development month for the entire plan in the entertainment way below that in that recommendation. Is it still relatively fear at this stage by the overall scheme cable Lance cable continued to Trend that has the potential to further improve is user skills and revenue performance on top of the lake. He goes all our motor with two for the integrated the high quality result of the two platform improving our authors know if interested in and work with the passenger to jointly explain to our service offerings along the value chain as well as in the Dead.
Online payment instrumental Sacramento. This will increase the overall value of the
platform and unlock a greater course position in the fusion
Yeah, thank you.
The next question comes from Daniel Chen from JPMorgan, please. Go ahead.
Yep. Oh, well, maybe she's going to be hold on Thursday instead. I was I was trying to find myself. So my question is related to the competition Landscape Management. Give us a on the competition landscape scenes the fourth quarter this year in a game between main industry and also after the of the potential Berger with who you spoke to change how we going to see the in the market in terms of the competition and also as we have already signed a uh, a merger ugly, but so what
What kind of the important procedure are we going to see in in the future before the transaction? Thank you.
Young woman. Yep. Yep. That's a good that's like thinking that we should be able to seat you behind your whole they can have it usage way you work from home and the teacher was to them immediately which is so if you polish and you said that you don't actually even function and once you find the 2000 season that she's usually assigned to go dead.
Okay. We'll see you Thursday in the end of the month of May you're talking about. You know that clicking the changes to bring it in for that stress and you go hide the time allocation tissue inside dog.
So regarding your question on the condition, you can leave that the industry is competitive landscape has not changed significantly since the older Folks at Sentry flashing platform. We would continue to
Use our intentions count and legal system and explore other game related areas such as video and abilities documents on top of our live streaming, I think we'll media platform enter the market we have table and customer service station wagon also counts too late the seating of the entire game last month. We just adapt to the T and launched the version 7.0 of collapse and end of last year off with the updated and refined and the community continent. We can now provide more data file content to our users.
From the competition protective. We believe that the industry competitions in the government mainly revolved around the requirement of Sacrament operation and the same content and applications optimization as well as rapid deployment of Blockbuster game. And in the long run, we expect that I am having issues more focus on rapid product and innovation of consent forms of Video Entertainment function the development team to translate installed communities and the integration of resources, but we talked and industries oil change and we have been focusing on Thursday, uh games then the account and platform in Inception and we have clear advantage in terms of professional content creation and company information off.
What you cooking user base information and do the agencies as well as conservation of professional content inconsistent. We have created a stronger comes in bahria. And as a result, we have clearly advantages in terms of attracting as maintaining core gaze of The Bays so looking not believe that with the lift limited seating of the entire industry. We won't take advantage of a dimension content and managing stress off then use the coverage and with the traffic and after the merger, we expect more invest commercial cooperation between the two platforms as well as with Iraq, which we believe will further enhance the positioning of the combined entity some questions as to just responded currently the Dead.
Major is still ongoing and you know, uh looking forward to our next steps including new getting approval from the SEC and uh from the relevance to Massachusetts. And so now we cannot really tell if that the timing to the deal.
Thank you.
The next question is Alex Lange from China Renaissance, please go ahead.
And because he wanted to make an issue what kind of woman bashing joke will take the picture trying to see how long it's fine. I'm no I'm going to wait like that woman. Did you take a look off the shoulder?
So thank thanks management. I noticed the company has made a notable investment of short video and virtual community in the past few months to the management share more cover them. And the second question is found on the League of Legends Championship. You know, what are the major takeaways and observations from that event and finally, what are the major Revolution? Thank you.
Hou Yi deal with minimum wage and she's what creature that you should see that. Would you mind removing some changes that changes the whole package that you can see the name of your blog had a dog?
If I can you see again, let me see uh way to get into the question. We have received the video and Community second on top of our life-changing Products company and expecting three Adam to become particular for our integrated game. We hold it down.
Nineteen, we will continue to produce in addition to our existing day. We will also totally Monitor and new process of Aging monkeys Explorer attractive to our users develop our energy to them and program and produce more content with officials in for a 20-second video business. We have already completed the first phase of infrastructure development and Thursday. We have already signed up with updated video and Community setting at the end of last year.
We have also introduced video content creator incentive programme to gather with our home. We have a Sunday and extensive Content Library to satisfy users diverse demands and in addition for our community business with the upgraded the community.
Definitely call you back and he ate his interest groups, but was he on game Discovery instructions and discussion.
Let me answer your second and third question. Second question is about ten tournament as we know the League of Legends World Championship is the wage is the complications of issue a new tournament and has always attract a larger number of viewers in the first half of twenty-twenty many off of line is for the tournament or postponed or cancelled because of the enemy blinking extent went over the field Global is positive. M2020. How can I stay in Shanghai to the dealership and the internet users in China Wok?
League has always been a strong take them into stories platform. In fact, we have a large number of well-known streamers resources and multiple choice streamer and the contender system for this segment.
In addition, we signed the contract to be the many famous domestic and international International League of Legends is called t e g g t f and the WT combined strength our exclusive partnership with multiple. Social platform us the most popular game live streaming platform for the championship and the true record high operating metrics during the tournament. It also helps a chapter more high-quality user traffic to the mentor our platform as our go-to technician for watching our our tournaments wage and the third question about how to increase Revenue will continue to derive and refine our consultation product dead.
This product features different user profile improve existing users and calculate bought a new Universal ping Habit to for the involved daily revenue contribution and the Ping issue to maintain September's Revenue growth. We plan to talk to our platform platform light events and most skill monetization events to raise our penetration and translate our pin yogurt and you
Games into English content ecosystem. We will further diversify our Contender offering and increases faith in you an hour-long segment. I used to take them high amounts ization efficiency such as long and the short. Thank you.
No, thank you.
The next question is from Zell from International, please go ahead.
Just an appointment and you guys took bank account and check out look at the output and number of changes as in 2021, and my second question is, could you please give us a breakdown of the content Post in the first quarter and also the trend of the signing up bonus for Life broadcast in dispatch reporters, and how should we think about returning going forward? Thank you.
Let me answer the first question. We express our games Sacramento to continue to be the major live streaming Revenue contributor to our platform gave me take manager has demonstrated strong strong growth potential in both back to the from. Our gaming segment is expected to account for 50% of our total revenue in 2021. And we flying to increase this month going forward increase the revenue contribution by strategically educating traffic between segments.
we continue to focus on platform why the monetization events and increase the accuracy of the most skilled monetization limp mode to calculate users pin habits and increase their willingness to pay put our total thing users and Arabic you will further wage increase
regarding your question to send a bonus.
The corner of quarter inquiries about signing bonus during the first quarter was due to two reasons first. We continue to recruit new streamers same amount came segments to maintain a high quality content offerings of platform second increase our investment require streamers in the overseas Market. I'm looking like that the signing bonus with increased at a stable rate due to a rapid National Expansion and the increasing signing bonus or overseas streamers Dead Ops team is from new team titles.
Our last question comes from Thomas Chong from Jefferies, please. Go ahead.
One second. I'll fix the issue some time. When I turned on a one-week a payment information regarding the payment cost camera and comments about the sequential Trend in to 4 as well as probably should think about the driver for the costs going forward on the oil change as well as the driver for sales and marketing and going dead.
Thank you.
Okay with respect to the bandwidth cost in the first quarter panel is cost increased slightly because of lack of tournaments and more frequent usage. Apart from that we provide users with more high-quality live streaming the options such as Folk a high definition. We do we expect bottom is called in plenty, press one to increase along with English in users. However, well as costs as a percentage of total revenues would continue to decrease
Question is about this sales and marketing expenses.
Sales sales and marketing expenses excluding should this conversation mainly include staff salaries and other related expenses cannot promotion costs to ship fees for each SWAT team as well as expenses for offline and online events in the first quarter of 2020 sales and marketing expenses, excluding SPC increased sequential basis to increase what do two more tournaments without into our increased marketing expenses and increased wage IDs for sale organized sport tournaments.
We have 5 policies towards the tournament of the East was industry the long run and we will continue to increase our investments in sports related activities. And in fact sponsorships going forward. Meanwhile, we place our user conversion will increase because of the updated features of platform and we plan to enhance wage kind of promotions helpful in the future the absolute values of our sales and marketing expenses will increase while as a percentage of off the raft you sales and marketing expenses will continue to optimize
There are no more questions in the queue. This concludes. Our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.
Thank you for joining us today. We have time.
Please contact support request. Thank you and have a good day.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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