The failure of a planned merger of Chinese gaming livestreaming platforms DouYu International Holdings Ltd. and HUYA Inc. will not significantly change either company's strategic operations or financial outlook, executives said.
HUYA's CEO noted that content investment may be slightly lower than expected in the second half of this year, however.
China's market regulator recently halted the proposed merger, citing concerns that it would give Chinese internet services company Tencent Holdings Ltd., which has stakes in both DouYu and HUYA, a dominant position in the game livestreaming market.
In an Aug. 17 earnings call, HUYA CEO Dong Rongjie said the company had not made any changes to its content strategy while the deal review was still pending, and it would continue to focus on integrating its livestreaming and video-streaming services for content developers.
The company also aims to launch a new app specifically for its video streaming service in the second half to further attract and retain mobile users, CFO Liu Xiaozheng said.
Average monthly active users of Huya Live in the second quarter increased 2.6% year over year to 77.6 million, from 75.6 million in the same period of 2020, according to the company's earnings release. Total net revenue for HUYA increased by 9.8% to 2.96 billion Chinese yuan, from 2.70 billion yuan for the same period of 2020.
Second-quarter net income attributable to the company was 186.3 million yuan, compared with 206.8 million yuan of a year prior. Diluted net income per American depositary share was 0.77 yuan, compared with 0.87 yuan of the prior year. The S&P Capital IQ consensus estimate was 0.64 yuan per share on a GAAP basis.
Regarding its relationship with Tencent, HUYA will "further deepen cooperation" on licensing to stream games, Dong said.
Similarly, DouYu CEO Chen Shaojie also expects limited changes in its operations following the merger failure.
"We will continue to fortify our operations in non-esports segments to accelerate our growth and cultivate a game-centric content ecosystem on our platform," the CEO said in the Aug. 16 earnings call.
DouYu plans to build up its livestreaming and video-streaming capabilities in esports and non-esports topics to better compete in its market. "Our initiatives include encouraging livestreaming video and community function integration," the CEO said. Community functions refer to the Instagram-like posts and commentary sections that users can use to interact with each other.
DouYu's mobile MAUs in the June quarter of 2021 increased 3.9% year over year to 60.7 million from 58.4 million in the same period of 2020.
DouYu's total net revenue for the second quarter was 2.34 billion Chinese yuan, compared to 2.51 billion yuan for the same period of 2020.
Net loss attributable to the company was 147 million yuan, or a loss of 45 fen per ADS, compared with net income of 336 million yuan, or 1.02 yuan per ADS, of a year prior. The S&P Capital IQ consensus estimate was a loss of 60 fen per share on a GAAP basis.
As of Aug. 16, US$1 was equivalent to 6.47 Chinese yuan.
