欢聚集团（JOYY）：多元化收入来源取得成果

2023A2024A2025E14,859.014,662.013,537.013,978.01,754.21,867.91,760.0 2026E1,826.0 Thomas Chong * | Equity Analyst852 3743 8016 | thomas.chong@jefferies.comZoey Zong * | Equity Analyst852 3743 8163 | zoey.zong@jefferies.com The Long View: JOYYInvestment Thesis / Where We Differ•We view JOYY as one of the few Internet companies in China to havestepped up efforts to expand overseas, and we consider its strategy oftapping into the global live-streaming and short-form video markets aspositive for long-term growth.•We expect Bigo Live to remain a major revenue driver, with increasingcontribution from short-form video platform Likee.•JOYY has about 400m users worldwide and achieved successfulmonetization in overseas markets, and we expect its investments to bearfruit in the long run.Base Case,$57.3, +31%•Bigo continues to pursue its two-prongedstrategyin live-streaming and short-formvideo to embrace long-term opportunities.•Compared to China,Bigo's monetizationpotential in overseas markets is better due tousers' willingness to pay, and the scale of theuser.•PT of US$57.3 based on SOTP valuation.Sustainability MattersTop Material Issue(s): 1) Customer Privacy.Companies in the Internet & Media Services industry relyon customer data to innovate new tools and services, while the use and storage of a wide range ofcustomer data, such as personal, demographic, content, and behavioral data, raises privacy concerns.2) Employee Engagement, Diversity & Inclusion.Employees are the key contributors of value creationin Internet & Media Services industry.Company Target(s): 1)Attract and retain a global and diverse workforce.2)Comply with laws,regulations, ordinances, and industry standards to ensure data privacy.Qs to Mgmt: 1)What is the competition in acquiring high-quality employees?2)What areas can befurther improved to strengthen privacy protection?Please see important disclosure information on pages 6 - 10 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Upside Scenario,$68.52, +57%•Stronger-than-expected user growth for Bigoin overseas markets.•Accelerationindomesticrevenuegrowth on the back of macrorecovery.•Successful monetization of overseas traffic.•PT of US$68.52, based on SOTP valuation. Downside Scenario,$23, -47%•Aggressive spending on sales and marketingfor Bigo in overseas markets.•Slowdown in domestic live-streaming revenuedue to macro headwinds.•Stringent regulations in short-form video andlive-streaming.•PT of US$23, based on SOTP valuation.Catalysts•Stronger-than-expected MAU growth•Market share gains in overall live-streaming•Rising paying user ratio and ARPU in live-streaming 2 live-streaming (4) Live streaming revenue performance varies by region. Developed countries continue tooutperform (e.g. US) and Middle East regions affected by seasonality; (5) build up diverseand engaging contents library; (B)BIGO.These include (1) In 2Q, live-streaming revenue isexpected to have positive QoQ growth as the adjustments (e.g. non-core audio lives streaming,phase out negative ROI channels) is fully implemented; (2) In developed markets (e.g. US),Bigo Live experienced positive MoM growth in Feb and Mar in certain developed countries(e.g. US); (3) advertising is expected to grow QoQ in coming quarters; (C)Group level non-GAAP operating profit.By segment, (1) BIGO’s non-GAAP operating profit is expected to havepositive QoQ growth in 2Q. For full year, segment non-GAAP op excluding the impact fromnon-core audio live-streaming is expected to remain stable in 2025; (2) All Other segment non-GAAP operating loss is expected to have meaningful reduction in 2025 vs 2024; (3) Grouplevel op loss is expected to improve in 2025 vs 2024; (D)Advertising maintains fast growth.Advertising revenue experienced 27% YoY growth to USD80m, backed by its large user base of260m people worldwide. Competitive advantages of JOYY (1) strong localized operations andextensive global reach covering both domestic and international advertisers; (2) better returnson clear measurements and proof of placement impact; (3) AI technologies; (4) strong R&D andnetwork infrastructure; (E)Capital allocation.These include (1) short-term: expand headcountsand marketing resources prudently to support the business while maintain healthy profit margins;(2) medium to long term: investments into infrastructure upgrades, technology development,talent expansion and marketing efforts; (3) consistent track record in delivering shareholdersreturn.Valuation and risks.We maintain our Buy rating and adjust PT to USD57.3 (prior USD57.1),factoring in the latest business trends post results. Risks include (1) aggressive spending inoverseas marketing; (2) slowdown in domestic live-streaming revenue due to macro headwinds;and (3) stringent regulations in short-form video and live-streaming.Please see important disclosure information on pages 6 - 10 of this report.This report is intended for Jefferies clients only. Un