 Good day, fellow investors. In this video, we'll give an overview of the Chinese online streaming investment opportunities. YY, MOMO, Huya, Vaibo. And we're going to put, compare them, see what's going on with their user growth, what's their revenue potential, what's the perspective on the market. And the topics we're going to cover today are. We'll start with an overview of the stocks discussed, YY, Huya, MOMO, Vaibo. Give a market overview of the competition, the risks, the business, the model, business model rationale, the fundamental comparison, the revenue growth of each stock valuation, earnings per share, guidance, cash per share, book value. We'll put all those four shares into our comparative table of the big number of Chinese stocks we already covered. So please check the playlist on YouTube with all the Chinese stocks. And then we're going to conclude with the investment risk and rewards. Let's start with YY. Online streaming business scandal-clad girls entertaining mostly males. The business model is that the girls receive tokens of appreciation from their fans. And YY gets a cut of offering 50-55% on that. Their vision, the goal is to really spread around online dating, social games, outdoor sports, game broadcasting, etc., etc. They are the number one live streaming social media platform in China according to monthly daily average users total time spent. So they have a large and rapidly growing user base, 80 million people. Massive and growing revenue, they have started to monetize what they do and they have seen very nice revenue growth over time. Platform, they have new monetization initiatives and they are trying to leverage that onto the high user base. Profitability is there, the company is very profitable with strong operating cash flow, something to keep in mind when analyzing stocks. On the conference call notes, the management is expecting slow down in growth 25-30% and that's probably including Huya that's still consolidated. We'll talk about the ownership there. However, what's very significant for me, I have analyzed YY a year ago, you can see an old video, recommended it as a buy and I think the selling price was 120 so people that bought it sold there. But what was the key factor when investing in YY a year ago now has already changed. The management is also already talking about completely different things and we have a new platform called Bigo that is expanding in India, Saudi Arabia and Southeast Asia. So something new, they have invested a lot of money in it. So we'll see how that expands over the long term and their monthly active users are already at 40 million in the first half of the year. So investments, a lot of investments and but a profitable company and they have made a lot of cash. They have a lot of cash on their balance sheet. However, on the direct question in the conference call, what will they do with that cash? It was not about dividends, it was about further investments and acquisitions. On the question, what will they do with their cash 6 billion onshore and 20 million dollars offshore, we are actively looking at different kinds of mergers and acquisitions. When Natalie asked in terms of share, buyback or dividend payout, no immediate term. We're going to focus on organic product, sales and marketing and mergers and acquisitions. Okay, as an investor, you want that cash out and that's something they are not doing, which is one reason why the stock is cheap. We'll see later in the fundamentals. Something very funny with any stock from China that I analyze, everybody is going on to artificial intelligence, big data, blockchain and I am surprised that this chart from YY doesn't show blockchain. But thankfully, if you go into the conference call, here is the blockchain. They truly believe they will be the leader for the blockchain going forward. Great, so artificial intelligence, blockchain and all that blah, blah with every stock that is there. Nevertheless, let's talk about Huya. It's 45% owned by YY, so it is consolidated because they have control over it. However, it's 31% owned by Tencent and Tencent can bring up its stake to 51% by buying shares at a price of $7 per share, which is much lower than what is the current stock price. So there will be dilution for YY, they own now 44%, it will go down to 31%. So let's look at this Huya. They guide for 109% revenue growth and gross margin improvement of 50 basis points. They are the most active live streaming platform in China, 87 million users, 99 minutes spent on the app per day per user. So they monetize again, same thing, advertising, live streaming services, subscription, whatever. I don't know, I just checked the platform fastly and this girl was rolling dice and playing some game. I don't know, I don't understand the business, but that's what people in China enjoy watching. Gaming entertainment market will grow in the future. It's already a big deal and it's expected to grow even faster. If we look at what are the expected revenues, the market is expected to double in the next four or five years. On the ownership, YY now owns 44.5% of the company. Tencent has a right between 2020 and 2021 to buy and reach 50.1% of the voting power. In order to do that, they have to increase the number of shares from the current perspective that's from the current place where they have 65 million shares to 51%. So if that happens, total number of shares will go up from 204 million to 280 million, 70 million. So Tencent will have to buy 75 million shares at 7.19 dollars. So that's about 500 million that will flow into the company. That's not bad, but YY will be diluted by that number of shares. If I put that perspective, the current market cap is 5.1 billion, I didn't add the 500 million from Tencent, but the value then after the dilution for YY is 1.5 billion according to the market cap. If we put that into fundamental perspective, the market cap for YY is 5 billion minus 1.5 billion for Huya. So 3.5 billion is what you actually pay for YY if Huya gets deconsolidated. So they have almost 1 billion in cash. So then the actual market cap is 2.5 billion on 100 million in operating income per quarter. That's 400 million on 2.5 billion. So you're practically paying a price earnings ratio of 6.25 for the YY business. So YY is cheap and it's getting cheaper. I think it's now cheaper than it was a year ago, but we have to put it into the market's perspective. But let's see first about MoMo, Vibele and then we'll put everything into a comparison and you will see why it is so cheap. There is a reason and one reason is already mentioned. They will spend the cash into something that's again uncertain and not pay a dividend. If they would pay at least 50% of that in a dividend, then it would be a more appreciated stock for investors. The MoMo, the online dating, social entertainment platform, again live streaming meeting first seen as a sex app, but okay. Then they acquired Tantan, the Tinder of China. So they will combine them, try to leverage the users, etc. Live streaming is 85% of revenue. And something interesting, they have issued convertible notes recently to acquire the companies. They have issued 600 million in convertible notes, which will lead to future dilution if the stock price hits 64.61 somewhere in the future. There are competitors, Billy Billy, iQui, Huya, YY, etc. So again, Tencent is investing in W, which is again, Ipo, Plan, Panda TV, etc., etc. Vibele is not so much into live streaming, more a blogging, micro blogging platform, also growing extremely fast. Users can send messages. They ditched the 140 Twitter business model in 2016 and made it more similar to Facebook. Huge growth there. Let's dig into the fundamentals, which will give a better perspective. YY guidance growth 25%, Huya 103%, MoMo 51%, Vibele 49%. So huge growth numbers. The most profitable on a price earnings ratio is YY. MoMo also very good with the staggering growth that should improve. So those companies are not really that expensive when you put it into a growth perspective. Also, cash per share, the highest is YY. So from a fundamental perspective, YY is really the cheapest. When I put everything into my comparative value table, if those companies slow down with their growth, I don't know, 20% for MoMo, 15% for YY, 25% for Huya and 30% for Vibele, then only YY is still undervalued. Without, it is even more undervalued if we limit the cash. Huya is a little bit overvalued. The present value gets closer to what Tencent is paying. Vibele is extremely overvalued and the similar thing gets for MoMo. Why am I putting evaluation of Ten when it comes to their 2023 profits because of the sector and the uncertainties related to the sector? The key question is, is the sector the growth sustainable? But let's first explain the boom into the online streaming industry. Fast internet, one child policy and 200, 300 people moving from the rural areas into the cities. So those online streamings are really catering to the need of human connection that unfortunately those people living in those cities feel the loneliness. So that's something that those platforms are catering, but there is a lot of competition. The barriers to entry are really small. There is regulatory oversight that can cut you in a second if you do things wrong. So the risk is also there. That's why those things are cheap and the visibility into the future is really small. And if you see over the last year, the engagement is really stagnating. YY 26 million, MoMo 71 million, Huya 11 million in January 2017, YY lower 22 million, MoMo even lower 44, 45 million and Huya a little bit growing in January of 2018. So stagnation in the number of users not really growing there, growing on monetization and international expansion, but that's again a risk. However, the growth in live video streaming market in China is expected to continue to be high 50% in 2018. We are seeing that but then slowing down to 31% with a lot of new competitors. There will be more internet users, so the market is growing. So what am I doing? I'm just looking at the market, putting into a perspective of all the stocks that I'm covering in China, looking at and seeing how to best fit, find the stocks for my Chinese portfolio exposure. These are not really value investment businesses because from a business perspective, where will they be in 5, 10 years? I don't know. They can be huge, but they can also be forgotten about. So that's something you have to put into the risk and reward perspective. The cash, the cash that YY has, the price earnings ratio is really attractive. And then you have to see, okay, how does that fit my portfolio? Will they ever pay dividends or will they just invest in growth growth over the very long term? We don't know. The competitors are constantly coming in finding new investors. So that's also something to think about regulatory pressures. If they say people are spending too much time on that, that might be a big hit in China. So put that into your perspective when investing. The stock on positive sentiments might explode again because all the stocks I think are relatively down from their highs, but they could also go down again. You really can't be smart with conviction here because nobody knows what will happen because the market is really a young market, an uncertain market, highly competitive market, where it's all about consumer preferences. And those things really shift very, very quickly. And we already see stagnating things with the YY first mover advantage, the base competitors Momo, Huya, even if it's from YY growing, taking market share, but already new competitors coming in. So it's a very uncertain environment. And please accept the risk reward if you are investing. I'll see when I finish the Chinese environment analysis, how does that fit my portfolio and whether it is fit for me. You have to see whether it fits for you. Thank you. Looking forward to your comments and I'll see you in the next video.