【行业研究报告】欢聚-2H23E recovery in sight

JOYY’s1Q23resultwasbetter-than-feared,withrev-6%YoY(4%above
consensus)andbottomlineatUS$50mn(155%aboveconsensus).Given
domesticbizadjustment,2Q23Erevguidancemissed8%.Weforecastrev-11%
YoY/-9%QoQin2Q23E(inwhichBigo-3%QoQ,largelyinline),partlydisrupted
byRamadanandcompetitionintheMiddleEast.Wesuggestinvestorstomove
into2H23Erecovery,withBigo’spositivegrowthinEurope&NorthAmericaand
stabilizationintheMiddleEast.Bigo’sOPMwouldberelativelystableYoYin
FY23E,withROI-drivenS&M.Tofactorindomesticbusinessadjustment,wetrim
FY23-25Etoplineforecastby6%-7%,butkeepearningsbarelychanged.Our
SOTP-basedTPisUS$46.WethinkYYhaslimiteddownsiderisksfromcurrent
level,supportedbyitsmarginimprovement,lowvaluationanddividendplan&
repurchaseprogram.WeexpectBigorecoveryin2H23Etohelpitre-rate.
Upbeat1Q23resultswhileguidancesoftondomesticbizadjustment.
Rev-6%YoY,4%/3%aboveconsensus/ourestimates,inwhichBigo/All
Rev-6%YoY,4%/3%aboveconsensus/ourestimates,inwhichBigo/All
others-12.5%/+29.7%YoY.Non-GAAPNPrecordedatUS$50mn(adj.
NPMat8.5%),155%aboveconsensus,mainlyondisciplinedS&M
expenses.YYwouldstepupitssharerepurchase,torewardshareholders
support.2Q23Erevguidancemissed8%,primaryduetobusiness
adjustmentfromothersegment.Excludingthat,Bigo’strendshouldbeintact.
Lookinginto2H23ErecoveryafterRamadan.GivenRamadaninMarand
Apr,BigorevintheMiddleEastandSEAmightseesomedisruptionsin
2Q23E.Afterthat,Bigomomentumstabilizedandgraduallyrecovered.We
expectBigorevdeclined3%QoQin2Q23E(-9%YoY),withsolidrecovery
inEurope&NorthAmericatooffsetsoftMiddleEastmkt.Mgmt.emphasized
oninnovativelocaloperations(e.g.“BigStarSearch”event)andcontent
developmenttoboostuserengagementandmonetizationofBigoLive.After
2Q23E,wekeeppositiveonBigoLivetoachievepositiveQoQgrowth.Likee
wouldseesequentialgrowthintermsofDAUandrevenuein2Q23E.For
othersegments,weforecasttotalotherrevatRMB75mnin2Q23E(-20%
YoY),duetodomesticbusinessadjustment.
Bigo’sfull-yearmargintrendintact.Weexpectnon-GAAPOPMofBigo
at12.8%in2Q23E,whilefull-yearOPMintact(forecastingstableYoY).
Businessadjustmentofallothersegmentmightleadtolessprofitofnear
US$10mnperquarter,butwouldbeoffsetbyhigherinterestincome.We
expectadj.NPMofGroupat5.8%/7.0%inFY23/24E,withcontinuouscost
disciplineandnarrowinglossofothersegment.
MaintainBUY.WekeepFY23E-25Eearningsbarelyunchanged,with
SOTP-basedTPatUS$46,byassigning6xFY23EP/EtoBigoLive.