Category: Momo
Momo’s Got An Edge In Dealing With The Chinese Government
THE MOTLEY FOOL – July 19 – Live-streaming hasn't taken off in the U.S. as it has in China. Of China's 730M Internet users, ~200M are active users of live-streaming apps. Credit Suisse is forecasting China's live-streaming market to be worth ~$5B by the end of this year. One of the beneficiaries of the streaming craze is Momo, which started as a dating app but quickly shifted to becoming a host for live video broadcasts. The company earned ~$767M in revenue over the past year, turning 30% of into net profit. In May, the The Chinese Ministry of Culture announced it had shut down 10 hosting platforms and punished an additional 48 companies. It also ordered 30k content-producing studios to cease operations. Although Momo was not a part of the recent crackdown, it is not free of the government's oversight. Momo had been used to disseminate inappropriate pictures of women. The company has acted to prevent the spread of illicit content by terminating tens of millions of user accounts, designating a team to monitor content, and using third parties and data analytics software to monitor activities.
Momo: When Tinder Meets YouTube
BLOOMBERG – July 17 – For 4 years, China's Momo bumbled along as yet another dating app. Similar to Tinder, Momo let users find people nearby and make a choice whether to pass or play. It wasn't a bad business. But it wasn't a good one. While sales grew at triple-digit %, Momo's 2014 full-year loss tripled to $25.4M. The company managed to hit a profit only in the Q1 2015. Momo net income wasn't too enticing while it bumbled along as a dating-app maker. The turnaround came when chairman, CEO and co-founder Yan Tang discovered video. At first, in Q1 2015, he allowed pre-selected performers to broadcast live concerts. Then in March and April 2016 he launched a broadcast app call Hani and opened up live video to everyone. Momo revenue exploded. From $15.6M in sales for the March quarter last year, live video rocketed to $57.9M three months later – accounting for 58% of total revenue. Last quarter that figure stood at ~$213M, helping the company post ~$81M in net income. Harvard Management Co., which oversees the university's $35.7B endowment, took note and bought 214,350 shares in the Q1 of this year – making it the fund's fifth-largest holding. Based on the stock's quarter-end price of $34, the fund has already netted a 21% return.
How Much Higher Can Momo Stock Go?
BNL FINANCE – June 28 – Momo started as an online dating app and has now progressed to being a full social media company. Momo monetizes its users in the following ways:
- Paid membership subscriptions – $2 a month, or less if a user commits to a longer term of use.
- Games
- Advertising/Marketing
- Virtual gifts or on-site purchases
Active users reached 85M in March 2017, up 18% year on year. Q1, 2017 revenue surged by 412% YOY, to reach $265M. The main revenue driver is live video streaming (3.5M paying subscribers). Momo has a market cap of $7.6B, zero debt, $739M cash, and a 1 year return of 262%. 2017 PE is 29. EPS is forecast to increase by 3.6 fold by end 2019, consensus price target is $48.30, about 24% upside.
Momo Partners With Four Music Labels
SCMP – June 19 – Momo is partnering with four music labels to turn its broadcasters into professional singers. The company will invest ~10M yuan ($1.5M) to establish a Momo Music Plan programme. BMG will produce albums for the shortlisted broadcasters, while Taihe Music Group, Beijing Haiyi Brothers Music – a unit of one of China's largest private movie production studios – and Yue Hua Entertainment provide professional training sessions, marketing and promotional plans.
Invest Or Not To Invest In Momo?
THE MOTLEY FOOL – May 29 – Up over 200% in the past 12 months, Momo is one of the best performing tech stocks out there. The company currently trades at 14x revenue. Any hiccup in the business can send the stock crashing. Here are some of the risks of investing in Momo.
- Government regulation of live streaming
Momo users send virtual gifts as a token of appreciation to content creators. In the early days, that content was often just a peep show, turning Momo into distributors of explicit content. China's Ministry of Culture (MOC) caught on quickly and implemented some restrictions. Additionally, the MOC now requires online streaming platforms to obtain a license from the government. The rules would make it more difficult for new entrants to occupy the streaming space.
- Not the only game in town
YY is with ~$1B in streaming revenue and 152M MAU well ahead of Momo. Additionally, Tencent invested in the broadcasting app Kuaishou, which announced plans to work with Tencent and Baidu on its platform.
Momo Q1 Financial Results: Revenue Up 421%
PR NEWSWIRE – May 23 – Net revenues increased 421% YOY to $265.2M (live video service revenue $212.6M, membership subscription & virtual gifts revenues $22.9M, mobile games revenues $11.6M, mobile marketing revenues $17.9M). Net income was $81.2M, compared to $12.7M for the same period last year. Monthly Active Users were 85.2M in March 2017, compared to 72.3M in March 2016.
Why Momo Jumped Another 12% In April
THE MOTLEY FOOL – May 8 – After climbing ~30% in March, shares of Momo grew another nearly 12% in April. The Chinese company has been pivoting over the past year from a dating app to a social-media platform, and it seems to be working. Momo shares are not cheap following their huge rise in the past year, trading now at ~50 times earnings. However, as the company continues to grow at astronomical rates, the stock is trading at just 20 times expected next year's earnings. If the company can keep up this growth for a few years, its stock is likely to continue climbing much higher as well.
Momo: A Significant Player In China’s Live-Streaming Market
SEEKING ALPHA – Mar 21 – Momo is one of the most popular social networking apps in China. It has evolved from a dating app to a major player in live-streaming, a very lucrative business in China. Revenues have jumped ~300% in 2016, and they still have a lot of room to increase further. Shares are cheap based on forward multiples, and the barriers to enter the industry are increasing. Momo started in 2011 by Yan Tang, former executive at NetEase. By 2012, it had 22M registered users, and as of December 2016, monthly active users (MAU) on the platform reached a record 81.1M. The company started generating revenues in July 2013, and is currently profitable. In the beginning, Momo was a dating app similar to Tinder. Over time, the company added more features, like groups, member forums or topics. In 2015, it launched live video streaming, which today generates the bulk of the company's revenues.
Momo Q4 2016 – Net Revenue Up 524%
PR NEWSWIRE – Mar 7 – Momo's Q4 2016 revenue increased 524% YOY to $246M. Net income increased to $83.8M, up from $6.1M in the same period last year. Monthly active users were 81M in December 2016, compared to 69.8M last year. Live video service, which was launched in Q3 of 2015, continued its strong momentum and generated revenues of $195M in the fourth quarter of 2016. The rapid growth in live video revenues is mainly because of the increase in paying users of live video service to 3.5M.