Yingke is one of the leading interactive entertainment and social platforms in China. Based on the industry's leading audio and video interactive technology and accurate understanding of market segments and crowd needs, Yingke has built a rich matrix of interactive entertainment and social products. Its core product, Yingke APP, is a pioneer in China Mobile Limited's live broadcast industry; Jimu APP is a leading social platform for interest in Generation Z; and Yuanyuan APP has quickly led the social upsurge of cloud dating in China. At the same time, Yingke has also hatched a number of other audio and video social products, and become a new growth point of the group's revenue. In July 2018, Yingke was officially listed for trading on the Hong Kong Stock Exchange.
Summary of the report
Issued Yingxi announcement, the performance is growing at a high speed. The company recently announced that it is expected to achieve operating income of 46-5 billion yuan in 2020, an increase of 41-53% over the same period last year, of which revenue increased by more than 50% in the second half of 2020 compared with the same period last year.
The product innovation continues, and the product matrix is constantly enriched. When the company went public, its business mainly relied on the main APP Yingke, which focused on live shows. With the intensification of competition within the live broadcast industry and the squeeze of new entertainment products such as short videos on the live broadcast industry, the company began to actively seek transformation. In the past two years, the company has actively carried out the development of new products and sought a new growth curve, which has also led to a short-term drag on the company's gross profit and expenses. After two years of cultivation, the company's new products are gradually mature, but also led the company's performance to restore growth. At present, the company's products focus on interactive entertainment and mobile social layout, covering live shows, voice rooms, 1V1 videos, cloud dating, stranger social networking and other sub-tracks, the rich product matrix ensures the predictability of the company's future growth. As the contribution of these products continues to increase, we expect the company's future performance to return to the track of rapid growth.
Actively layout the mobile social market. Compared with live shows, mobile social networking is a longer-term and more imaginative track. According to data from Ai Media Consulting, the number of China Mobile Limited's social users exceeded 900 million in 2020, an increase of 7.1% over 2019. In recent years, Yingke has actively laid out in the mobile social market. In July 2019, Yingke announced that it had acquired the younger interest social APP-- catalogue of the leading fashion brand, tune, for $85 million. Jiemu is younger in the user age circle, and its users are mainly generation Z (post-9500) users in first-and second-tier cities, with core users accounting for more than 80%, and a balanced gender ratio, with great potential for development. At the beginning of 2021, Clubhouse detonated the overseas voice social market, and Yingke actively followed up with the launch of the localized "Dialogue Bar". We believe that Clubhouse products focus on content-side operations. As the first domestic company to launch similar products, Yingke will gain a certain first-mover advantage in terms of KOL and user acquisition. In the long run, we believe that Yingke is moving from live show to mobile social development, and it is expected to upgrade the business ceiling and diversify the means of cash realization in the future.
Valuations are expected to rise. According to Bloomberg's consensus forecast, the company's forecast for 2021 is only 15x, which is lower than the average Pmax E 25x of Hong Kong stocks and US social and live stocks, considering that the company is back into a phase of rapid growth, we expect the company's valuation level to improve gradually.
Risk hint: user growth is slowing down; short video has an intensified impact on the live broadcast industry; and new business development is not as expected.