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Interpretation of Station B Q4 in 2018: Game revenue continues to decline, advertising and live value-added saved it

via:博客园     time:2019/2/28 11:33:38     readed:440

图片来源于视觉中国

American Stock Research Society

After Ali, Baidu, Netease and other Internet giants released their latest financial reports, the second yuan small giant Dali also formally presented its report card to the diplomat on February 28.

According to the observation of American Stock Research Agency, in the case of revenue exceeding expectations and monthly average number of users reaching a new high, although the stock price of Station B did not perform well before the closing date of 27 days, it rose by 4.23% after the announcement of earnings, and the stock price of Station B once exceeded $20.70 after the closing date.

As the third financial report after the listing of Station B, with the support of Ali and Tencent, Station B has formed a solid barrier to competition in the field of secondary websites in China, which makes its future full of great imagination. However, for station B, its commercialization ability has always been a pain.

Previously, in the case of game business and accounting for nearly 80% of the revenue of B station, many people said that B station is a game company, and compared B station with other companies including Netease and Tencent.

However, from the Q4 quarterly earnings of 2008 released by Station B, the game revenue of Station B has been declining for many quarters in a row. If it were not for the obvious growth rate of the business of Station B in the advertising and live value-added sections, I am afraid that Station B would not be able to meet the market expectations.

In the future, Station B is bound to be a star stock that is always worth paying attention to. But in this latest earnings report from Station B, the American Stock Research Agency hopes to give you a more comprehensive understanding of the core business of Station B and its future imagination or ceiling.

Game revenue continued to decline.Live broadcastandAdvertisementReal business growth slowed down

From its business revenue point of view, B station business revenue mainly concentrated in the game revenue, live and value-added services, advertising revenue, other revenue. According to the revenue of each business, although it has achieved year-on-year growth, the game business is still the core revenue of station B.

(1) Game revenue of Station B declined continuously in three quarters, and decreased by 80 million yuan in six months.

American Stock Research Agency found that in Q4 of 2018, the revenue of game business of station B reached 710 million yuan; in Q3 of 2018, the revenue of game business of station B was 740 million yuan; in Q2 of 2018, the revenue of game business of station B reached 791 million yuan, accounting for about 77% of the total revenue.

In this way, you will find that in the last three quarters, game revenue in Station B has been declining continuously. In a sense, it is not bad for station B to improve the revenue structure of other businesses, but in this process, game revenue is 80 million less after three quarters, which is no doubt not a good news for investors.

In the future, with the increasing concentration of relevant policies and industry resources in the game industry, B station, which has many active users, has quietly become one of the important active positions of game players, which is the advantage and opportunity of B station in the game business. But if we can not improve or stabilize the game revenue of station B in the optimized revenue structure, it will inevitably make the game business of station B and even the whole station B lose some imagination.

(2) Revenue growth of advertising and live value-added services is rapid, but the actual growth rate has slowed down significantly.

Compared with the weakness of the game business, the other core revenue business of Station B is still more competitive. According to B Station's financial data, in the fourth quarter, B Station's non-game business revenue share rose from 16% in the same period in 2017 to 38%. Specific business, advertising revenue reached 160 million yuan, an increase of 302% year-on-year; live broadcasting and value-added services revenue reached 200 million yuan, an increase of 276% year-on-year.

According to the US Stock Research Agency's previous financial observations on Station B, in Q3 of 2018, the revenue of live broadcasting and value-added services was 170 million yuan in the third quarter, an increase of 29.2% compared with the same period of last year, while the revenue of advertising business reached 140 million yuan in the third quarter, an increase of 179% compared with the same period of last year.

In Q2 quarter of 2018, the revenue of live broadcasting and value-added services was about 119 million yuan, up 186% year-on-year, 24% annually, accounting for 11.55% of the total revenue; advertising revenue was 95.863 million, up 132% year-on-year, up 58% annually, accounting for about 9.34% of the total revenue;

From Q2 to Q3, the advertising revenue of station B increased by nearly 45 million, and the revenue of live broadcasting and value-added services increased by nearly 50 million. This growth rate has been terrible. From Q3 to Q4, the advertising revenue of B stations increased by only 20 million yuan, and the revenue of live broadcasting and value-added services increased by only 30 million yuan.

It is undeniable that in 2018, the whole B station is very gratifying in terms of advertising revenue and revenue growth of live value-added services. I'm afraid this is due to the improvement of the user's viscosity in Station B. In the fourth quarter, the monthly average number of active users in Station B reached 92.8 million, of which 79.5 million were mobile users, up 29% and 37% respectively. The average daily use time of users increased by 5 minutes to 78 minutes from the same period last year. The average daily video broadcasting volume reached 440 million times, and the average monthly interaction reached 1 billion times, which increased by 107% and 298% respectively compared with the same period of last year.

In the future, with the support of Ali and Tencent, the active users and viscosities of Station B will probably maintain a high growth rate. However, from Q3 to Q4 quarter of the core business income situation, B station live value-added services and advertising revenue can continue to maintain high growth rate, which may be a very big challenge. The fact also proves that the revenue growth of the two core businesses of B station is slowing down, which is not a good signal.

At the same time, as of December 31, 2018, the total amount of cash, cash equivalents and term deposits in Station B was RMB 4.3 billion. Regardless of the cost of employee equity incentives, the net loss of non-GAAP adjusted by Station B in the fourth quarter was 150 million yuan, with a net loss rate of 13%.

In 2019, while increasing and stabilizing the revenue of game business, if Station B hopes to double the annual revenue of advertising and value-added services, in line with internal cost control, even in accordance with non-U.S. General Accounting Standards, Station B may not be far from profitability.

BThe growth of station users continues to be steady.Business revenue capabilityStill needs to be strengthened

For Internet platforms, user size and user stickiness become important reference indicators of platform development potential. Previously, media have been divided into three categories according to the user's viscidity to the platform. One is to attract the user's viscidity by content, such as video website Ai Youteng; the other is to attract users by anchor, such as live platform Tiger Tooth Fighting Fish;

The other is a platform like B station. Users treat B station with a kind of spiritual stickiness, mainly because they are willing to spend more time on B station to watch, interact, create and consume content.

According to the B station's financial report, whether from the monthly active users or users'daily average use time, the two data have achieved growth, which also shows that the user's viscidity to B station is increasing.

Earlier, Chen Rui, chairman and CEO of Station B, said at the earnings conference that MAU could reach 11 to 120 million next year, and by 2020, MAU should grow to 14 to 150 million. Although Station B has maintained a good growth momentum in terms of user size, at present it is not growing so fast in terms of revenue.

(1) Station B is facing the problem of scarcity of new games

Previously, Station B was considered to be a game company with a barrage. Whether there is such a label positioning or because the revenue of the game is still the core source of the revenue of Station B. According to the quarterly results, its game business still accounts for a high proportion of total revenue. However, the high proportion of game revenue is not a very happy thing for station B. After all, according to the development of the game industry, game manufacturers and platforms are still in a passive situation. They are greatly influenced by policy in the game business.

On the one hand, the revenue of the game business of Station B is greatly influenced by the policy, on the other hand, the game has a life cycle after all. If the game business is supported by only one or two games, it will eventually fall into the dilemma of losing money. In addition, station B is still facing a strong opponent in the game business. Compared with the strength of Tencent and Netease, station B is obviously still in the downside.

(2)Advertising and Live RevenueIt's hard to double growth again.

As a video website, the founder of Station B promised users that the website would never try to profit from video advertising to influence the user experience. It is precisely because of this concept that Station B does not earn a lot of revenue from advertising like Ai Youteng. Although station B wants to become a clear stream of video websites, investors may not be very supportive of such practices as station B, after all, revenue capacity is the most important thing for them.

As far as the revenue of Station B is concerned, although its revenue in advertising business and live broadcasting business has increased, their perception of existence is obviously not very high. For B station, on the one hand, it restrains itself in advertising business, on the other hand, with the rise of other platforms such as information flow and short video impact, it also makes many advertisers preferentially choose such platforms. How to control advertising in B station does not affect user experience, which itself still has some trade-off space.

Although the scale of users of B station is not small, there are still some deficiencies in the ability of B station to generate revenue from users in terms of current revenue. In the short term, these two businesses may also be difficult to achieve great growth space. For station B, if the revenue capacity is too single, it will naturally affect its valuation. For investors, they prefer station B to have greater breakthroughs in the growth of other businesses.

According to the B station's financial report, it is necessary to have B station's stronger liquidity ability in commercialization to maintain the loss, so as to offset and contact all kinds of investors'doubts. So, what can station B do in the future?

Relying on Ali and Tencent to let BStation has more room for development

As the leader of the second meta website, B station has become one of the few companies that can get the investment of Ali and Tencent at the same time. It can be seen that the development potential of B station is still favored by the two giants. Both companies have strong advantages in terms of flow, resources, and content, which will be of great help to the development of Station B. Similarly, in the view of giants, strategic investment station B still wants to further divide up the dividends of the secondary market, and the commercial liquidity of station B still has a lot of room.

According to Gamma data from third-party market analysts, in 2018, the number of secondary users in China reached 370 million, of which 270 million were pan-secondary users and 100 million were core secondary users. Data show that the total output value of China's animation industry in 2018 exceeded 174.7 billion yuan, an increase of 13.7% over the same period last year. For station B, they will turn the platform into a profit this year, or need more ecological efforts and investment.

At present, the number of generations Z is 328 million, and the permeability of station B is 28%. In the new financial report, the paying users of station B have increased year-on-year again, which shows that the stickiness of users is getting higher and higher. For station B, in order to increase the scale of users and increase the scale of paying users, we still need to rely on high-quality content, especially in the ACG (Animation, Comic, Game) ecological chain of animation and games.

In addition to increasing investment, B station itself still needs to produce better works, further improve the user's viscidity, and generate more revenue by borrowing users on the platform.

At present, Station B has invested dozens of Companies in ACG industry chain, involving animation production, virtual idols, content platform, secondary game development, audio, offline roaming activities and derivatives production and sales and other fields.

Only by maintaining more diversification in business revenue, can it be possible to increase its revenue accordingly, which is conducive to the stock price of Station B, which will also be further favored by investors. If station B wants to dig gold in the secondary market smoothly, it still depends on what major actions it will follow to accelerate commercialization.

[Author's introduction: American Stock Research Agency, Public No. meigushe, Focusing on American Science and Technology Stocks and China Stocks]

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