 Good day, fellow investors! Today I'll discuss Chinese pick number 4, MOMO or however should I pronounce it. MOMO is a live stream broadcasting platform similar to YY which we analyzed in the previous Chinese stock video. The Chinese live stream market is exploding and this is because 3G and 4G have entered the country and the internet penetration is constantly growing and there is still plenty of potential. As you can see here internet penetration in China is just at 53.2%. This is very low when compared to the 88% in the US or even above 90% in the UK. Just another short introduction about the Chinese live video stream market. It is expected to triple by 2020. The growth rates will be smaller than they have been in 2016 but still you want to be exposed to a market that will triple in the next 3 years. The top 2 leaders are YY which we already discussed in this video and you can check the videos in our Chinese stock idea playlist. And the second investment is MOMO which we'll shortly analyze today. The company is relatively equal to YY. See the front pages so live stream on YY and live stream on MOMO's page. So the two businesses are live stream businesses where broadcasters entertain their audiences, they get subscription, money, virtual gifts and the sites are also monetized through advertisement but that's just a small part of revenues. Going back to what's the business model. Well 80% of the broadcasters are females that entertain 80% of the males population that are the customers. A business model there is no pornography in China so you get the picture. However this works, the business is booming and I think the business is there to stay especially if China doesn't allow pornography for a long time. So what's the difference between YY and MOMO? MOMO is relatively newer. This is YY's streaming revenue and you can see how it has been growing pretty fast since 2012. However MOMO's revenue has been 0 in 2015 and has reached almost the same level as YY in Q4 2016. So MOMO is a faster grower than YY and if we check the last quarter's highlights we can see that net revenue increased 420% year over year. Net income went from 7 million to 81 million so 11 fold increase. These numbers are simply crazy. However if you listen to the company's webcast company expects revenue to grow 7% in the next quarter. 7% per quarter comes to 30% a year. Something similar to what YY's guidance is and this is very important for an investment decision. You'll see later in the evaluation part. Going back to MOMO its revenue stream is diversified and all the revenue streams are growing which is very important because with such online businesses when the customer base is made you never know which one of these revenue streams will explode in the future and will be perfectly monetized. So both YY and MOMO have a large customer base, slowly growing customer base, high growing monetization so they're really focused on monetizing. Both companies are very profitable and both companies expect to grow at the same rate around 7% per quarter, 40% per year alongside how the market grows. So extreme growth offered from both companies. A look at fundamentals will show us which one is the best investment. So MOMO's PE ratio is 48.9, YY's is 14, price to book again better at YY's, price to sales again better at YY's and price to cash flow better at YY's. As both companies expect the same growth in the future, YY has the huya which is also growing very fast which is something new like MOMO offers. I find YY a better investment from a margin of safety perspective. Now I didn't dig in which one is the best, perhaps the best way is to diversify into both and then if one of those investment explodes you are set especially as YY has a margin of safety. However if the companies continue to grow at the same rate their valuations will have to even out. So much more upside for YY and less upside for MOMO. I think MOMO has a higher valuation now because of the past growth but if the management doesn't see future growth then it's probably just a market mispricing. However I think that the PE ratio 40 is fair for a company that will grow 40% year over year. So YY is the underdog here, it's the undervalued company. So to conclude I think both are excellent investments, both MOMO and YY. The business model is certainly there to stay. More and more people will use mobile phones in China, more and more people will be entertained with such a form of entertaining. So the Chinese economy is growing, there will be more money for virtual gifts, there will be more phones, more internet, more everything. And you have to understand that such entertainment platforms are one of the only sources of entertainment and shopping for a Chinese citizen that is living in some lower tier cities. So the investment case I prefer YY however even MOMO I think will do well because at such a low price earnings ratio and the expected growth of 30% with the high potential it also looks like a good company. What are the risks? The risks are regulatory implications however both YY and MOMO have all the necessary licenses and the regulatory risks are more oriented to smaller players that went more into pornography than into entertainment and the government banned them immediately. Other risks, competition we have Alibaba Tencent coming in with their live streams but they are more oriented towards selling products, commercializing. So a bit different than MOMO from what I have seen. So given the growth of the whole market I think both YY and MOMO with their stable customer base will continue to grow and continue to monetize their projects. Very interesting stocks. The stocks jumped recently so it's a bit higher but the potential is very very high. Please leave your comments below your thoughts about which one is better MOMO, YY and if you have any questions please ask them in the comments below. Thank you for watching don't forget to subscribe as we will dig into I think more than 10 Chinese companies and I'm sure out of the 15 that you will get information here that you will find some good investments for your portfolio. I'll see you in the next video.