【行业研究报告】虎牙-Moving into mild recovery in 2H23E

Huyadeliveredupbeat4Q22results(within-linerevandbettermargin),but1Q23E
guidancemutedonseasonalityandepidemic(forecastingrev-13%QoQ).We
suggesttolookbeyondsoft1Q23E,andexpectlivestreamingtoresumepositive
growthin2H23E(forecasting-5%YoYinFY23E),backedby:1)arebaseafter
theregulatorychangeinlivestreaminginJunelastyear;2)macrorecoveryafter
China’sreopening;and3)newblockbustergamelaunch.Withcontinuouscost
controlandlicenserearrangement,wekeeppositiveonitsmarginimprovement
ahead,forecastingitsnetlosstonarrowtoRMB146mninFY23Eandexpecttoturn
profitabilityatgrouplevelinFY24E.WetrimmedFY23E-24Erevby1.2%toreflect
slowerlivestreamingrecovery(whilemarginbarelychanged),withTPadjustedto
US$6.9.
4Q22beatonmargin.Usermetricswereontrack,inwhichMAUreached
85.5mn(+0.1%YoY)whilepayingusersslightly-2%YoYto5.5mn.Rev-25%
85.5mn(+0.1%YoY)whilepayingusersslightly-2%YoYto5.5mn.Rev-25%
YoYtoRMB2.1bn,inlinewithconsensus.Livestreaming-24.4%YoY,mainly
onlowerARPPUamidepidemicimpact.Adsandothers-35.1%YoY,dueto
softadsandlowercontentsublicensingrev.Non-GAAPGPMwas-13.5%(vs.
consensusof-14.2%),mainlyattributabletooptimizedstreamer-relatedcosts
andbandwidthcosts,tooffsetincreasedcontentcostfore-sportrelated
content.Non-GAAPNPrecordedat-RMB440mn,aboveconsensusof-
RMB509mn,backedbybetter-than-fearedGPMandopexcontrol.
Lookinginto2H23Erecoverywithmarginimprovement.Givensoft
seasonalityandepidemicdisruptions,weforecast1Q23Erev-13%QoQ(vs.
prior-10%QoQ).1Q23Ewouldachieveabreakeven,backedbyhigherGPM
(upto10%,onlicenserearrangementanddisciplinedrev-sharingcosts).We
expectlivestreamingin2H23Etoresumepositivegrowth,mainlyon:1)a
rebaseaftertheregulatorychange;2)macrorecoveryafterreopeningamid
strongseasonality;and3)newblockbustergamelaunchtoboostuser
engagement.Forthewholeyear,weexpectFY23Erev-10%YoY,inwhich
livestreamingrev-5%YoY(1H23Edoubledigitdecline;2H23Esingledigit
growth).Withcontinuouscostcontrolandlicenserearrangement,wekeep
positiveonitsmarginimprovementahead,forecastingitsnetlosstonarrowto
RMB146mninFY23Eandexpecttoturnprofitabilityatgrouplevel.
MaintainBUY.WetrimmedFY23E-24Erevby1.2%toreflectslower
livestreamingrecovery,whilemarginbarelychanged.OurnewDCF-basedTP
wasUS$6.9(implying1.4xFY23EP/S,stillbelowaverage).Thestockistrading
belowitsnetcashposition,andweexpectitsrevresuminggrowthwouldhelp
itsre-ratingahead.