In the listed live broadcast platform, SJ.US is a player with relatively resilient performance.
Since successfully logging into the Nasdaq in the United States with the help of SPAC on May 8, 2020, Sixiang Infinity has continued to deliver a performance report of steady growth. Its revenue in 2020 and 2021 was 1.222 billion (RMB, the same below) and 1.669 billion, respectively, with year-on-year growth rates of 33.6% and 36.3% respectively; the adjusted net profit in the same period was 186 million and 219 million, with year-on-year growth rates of 24.2% and 17.6% respectively.
Although the outstanding performance is related to the rise of the online economy during the epidemic, if compared with the financial reports of other game live broadcast platforms, Sixiang Wuli's performance in the past two years has become "outstanding".
However, since 2022, Sixiang Infinity has also begun to show signs of fatigue. According to the company's financial report for the first half of 2022, the company's revenue during the reporting period was 970 million yuan, and increased by 27.9% year-on-year; the adjusted net profit in the same period was 139 million yuan, a year-on-year growth rate of 8%. Although revenue continues to grow, the growth rate of net profit has declined to single digits. What is the reason for the stalled net profit of
? Can Sixiang Infinite Regaining Regaining Regaining in the environment of continuous intensification of industry competition? With the above questions, Zhitong Finance APP will find the real answer through Sixiang Infinitum's latest financial report.
The obvious changes in the logic of performance growth
Since its establishment in October 2011, Sixiang Unlimited has seized the dividends of the era of mobile Internet and has become China's leading mobile entertainment live broadcast platform. The company has adopted a multi-platform strategy to create multiple live broadcast platform brands, including Showself, Lehai TV, Haixiu TV, which the company incubated, as well as BeeLive (Bee Live) acquired in August 2020 and Hongle TV (Hongle TV) acquired in January 2022. It is worth noting that the acquisition of BeeLive is mainly used for the expansion of overseas markets.
All platforms of singing unlimited are classified as "SHOW Live", that is, anchors mainly provide users with live entertainment services through performances, singing, dancing, talk shows and other content. Although the content of the platform is similar, Sixiang Unlimited has adopted different operating strategies for different platforms, and the company provides the technical foundation for these platforms, making the interaction between the platform, anchor and users closer.
According to Sixiang Unlimited's first half of 2022 financial report data, as of June 30, the total number of registered users of the company's platforms was 317 million, an increase of 18.73% from 267 million on December 31, 2021. By disassembling the changes in the platform's three data: anchors, paid users, and ARPPU, we can discover the secret behind SiXiXi's unlimited performance.
Zhitong Finance APP found that in 2020, Sixiang Unlimited's total number of anchors achieved explosive growth due to the impact of the epidemic and the acquisition of BeeLive, increasing from 34,700 in 2019 to 192,400 in 2020, an increase of 455.22%, and the anchor side expanded rapidly. During the same period, paid users increased by 29.69% to 904,600, and the average expenditure per paid user was 1,345 yuan, an increase of 2.99% year-on-year. It is precisely because of the growth of paid users and the increase in average revenue per paid user that Sixiang Infinity achieved a good result of 33.6% revenue growth and adjusted net profit growth of 24.2% in 2020.
After entering 2021, although the platform's anchor side is still expanding, with the number of anchors increasing by 50.16% to 288,900, the number of paid users has declined, down 7.07% year-on-year to 840,600. The decline in the number of paid users may be affected by the following potential factors: First, the epidemic slowed down in 2021, production and operation gradually returned to normal, and the time spent by the public on live entertainment has decreased, so the number of users on the platform has decreased in 2020; second, the number of paid users has gradually been lost due to the intensification of industry competition.
However, as paying users declined, Sixiang Unlimited's average revenue per paying user increased by 45.93% to 1,962.7 yuan, which drove the company's revenue to grow by 36.3% in 2021 and its adjusted net profit to grow by 17.6%. Obviously, Sixiang Infinite's performance in 2021 is completely driven by "price", while "quantity" has lost momentum.
From the first half of 2022, Sixiang Infinity's decline became increasingly obvious. Both the anchor and paid users fell year-on-year, with the number of anchors falling by 57.15% to 86,700, and the paid users fell by 6.56% to 445,800 year-on-year. Revenue growth of 27.9% to 970 million yuan during the reporting period was driven by an increase of 36.15% to 2143 yuan per paid user.
From the perspective of profitability, Sixiang Wuli's gross profit margin in the first half of 2022 was 21%, the same as the same period in 2021, which shows that the company's revenue cost is well controlled, but the adjusted net profit growth rate has declined to 8%, mainly due to the increase in total operating expenses.
During the reporting period, the total operating expenses increased by 36.27% to 73.772 million yuan, and the proportion of total revenue increased from 7.14% to 7.6%. From the perspective of splitting, the increase in operating expenses is due to the increase in general and administrative expenses and the increase in R&D expenses.
From the above analysis, it can be seen that the driving logic of Sixiang Infinite's performance growth in 2020 is significantly different from the first half of 2021 and 2022. Since 2021, the number of Sixiang Infinite's paid users has continued to decline. Although the increase in average expenditure per paid user has maintained revenue growth and gross profit margin level stability, the continuous loss of paid users has become a key signal, which may indicate the intensification of industry competition.
Under the competitive pressure, the number of paid users can be compared with 17% decline. Although it is both a live broadcast industry, there is a clear difference between SHOW live broadcast and game live broadcast in business models. SHOW live streaming is more inclined toward the "hormonal economy", and each anchor interacts with users in real time, so the number of users each anchor serves at the same time is limited. However, game live streaming is more inclined to the "fan economy", that is, it emphasizes that live streaming requires highly popular anchors and popular games to form a huge scale effect. The difference in
service types is naturally reflected in the financial statements. SHOW Live emphasizes real-time interactive services, which have relatively high stickiness with individual users. The expenditure of single paid users naturally remains at a higher level and has relatively large room for improvement in elasticity. Therefore, Sixiang Unlimited expenditure per paid user is 7-8 times that of each paid user of game live broadcast platform.
and SHOW live broadcast is based on the "hormonal economy", and it is difficult to train anchors and can expand rapidly. This is also the core reason why the number of anchors soared to nearly 300,000 in 2021; on the other hand, game live broadcast requires huge funds to purchase game copyrights and sign contracts of highly popular anchors, so it is difficult to make a profit after continuous losses, while Sixiang Infinity shows a relatively good profit level.
But whether it is SHOW live broadcast, game live broadcast or other video platforms, they have to face the impact of Douyin and the rise of Kuaishou. Since the time users spend on video entertainment content is generally fixed, Douyin and Kuaishou’s content presentation methods based on recommendation algorithms are easier to make users addicted, which means that users can stay for a longer time.
And from another perspective, the content of Douyin and Kuaishou is more diversified, richer, and has strong user-gathering ability. Based on the rich ecosystem, it is a natural way to layout SHOW live broadcasts. It can be used for SHOW live broadcast platforms such as Sixiang Unlimited. Douyin and Kuaishou have the core competitiveness of ecological content.
If you are a veteran Douyin user, it is not difficult to find that there are already many "handsome men and beautiful women" live broadcasts in Douyin. There are not many people online in these live broadcast rooms. With a scale of more than ten people, you can interact with users in real time. In fact, there is no obvious difference between the SHOW live broadcasts that I love infinitely. Since such services can be implemented on Douyin, will Douyin users return to other SHOW live broadcast platforms?
digs into Sixiang Unlimited's latest financial reports and finds that the loss of paid users of the company is actually very serious. Although the company's paid users only fell by 6.56% to 445,800 in the first half of 2022, it should be noted that Hongle TV was consolidated in 2022, so it added 50,000 new paid users. If the impact of Hongle TV and only consider the other four comparable platforms, Sixiang Wuquan's paid users in the first half of 2022 was 395,600, a decrease of more than 17% from 477,000 in the first half of 2022.
You should know that the epidemic rebounded in the first half of 2022, and the online economy benefited from it, but Sixiang Infinite's paid users experienced such a significant decline, which is enough to show that Sixiang Infinite is facing greater competitive pressure.
If the loss of paid users cannot be stopped, Sixiang Unlimited Performance Growth can only rely on the continuous increase in the average expenditure per paid user, but this indicator cannot grow unlimitedly. The average expenditure per paid user in the first half of 2022 was 2143 yuan, a significant increase of 64% from 1,306 yuan in 2019. Even if the average expenditure per paid user continues to increase, the range is likely to gradually become smaller.
Based on the above logic, before paying users stop losing and stabilize and rebound, Sixiang Unlimited fundamentals have major flaws. After all, users are the core wealth of Internet companies. However, considering the higher-dimensional core competitive advantages of Douyin and Kuaishou in the content ecosystem, Sixiang Unlimited has no means to deal with this challenge in the short term or for the time being, and the "blood loss" of paid users may continue for a period of time.
