Post Earnings Coverage as YY Inc.’s Quarterly Revenue Soared 30.8%; Adjusted ADS’ Rocketed 40.3%

Upcoming AWS Coverage on Phoenix New Media Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 27, 2017 / Active Wall St. announces its post-earnings coverage on YY Inc. (NASDAQ: YY). The Company reported its financial results for its fourth quarter and fiscal year 2016 on March 14, 2017. The Chinese social networking Company smashed passed top- and bottom-line expectations. Register with us now for your free membership at:

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One of YY Inc.’s competitors within the Internet Information Providers space, Phoenix New Media Ltd. (NYSE: FENG), reported on March 13, 2017, its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2016. AWS will be initiating a research report on Phoenix New Media in the coming days.

Today, AWS is promoting its earnings coverage on YY; touching on FENG. Get our free coverage by signing up to:

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Earnings Reviewed

YY’s net revenues increased by 30.8% to RMB2.48 billion (US$357.8 million) in Q4 FY16 compared to RMB1.90 billion in Q4 FY15, primarily driven by the increase in live streaming revenues. The Company’s revenue numbers came in ahead of analysts’ consensus of US$352 million. Live streaming revenues surged by 41.7% to RMB2.22 billion (US$319.5 million) in the reported quarter from RMB1.57 billion in the corresponding year ago same period.

For the full year of 2016, YY’s net revenues increased by 39.1% to RMB8.20 billion (US$1.18 billion) from RMB5.90 billion in FY15, primarily driven by a 54.8% year-over-year increase in live streaming revenues.

For Q4 FY16, YY’s gross profit increased by 26.4% to RMB924.6 million (US$133.2 million) from RMB731.6 million in Q4 FY15. The Company’s gross margin was 37.2% in the reported quarter compared to 38.5% in the prior year’s same period. YY’s operating income in Q4 FY16 surged 51.7% to RMB621.5 million (US$89.5 million) from RMB409.8 million in Q4 FY15. The Company’s operating margin in the reported quarter was 25.0% compared to 21.6% in the year earlier comparable quarter.

Non-GAAP operating income increased by 37.6% to RMB647.9 million (US$93.3 million) in Q4 FY16 from RMB471.0 million in the corresponding period of 2015. Non-GAAP operating margin was 26.1% in the reported quarter compared to 24.8% in the prior year corresponding period.

During Q4 FY16, net income attributable to YY Inc. soared 59.3% to RMB572.3 million (US$82.4 million) compared to RMB359.2 million in Q4 FY15. Net margin in the reported quarter grew to 23.0% from 18.9% in the corresponding period of 2015. Non-GAAP net income attributable to YY Inc. increased by 42.4% to RMB598.6 million (US$86.2 million) from RMB420.4 million in Q4 FY15.

For Q4 FY16, YY’s diluted net income per ADS increased by 56.1% to RMB9.74 (US$1.40) from RMB6.24 in Q4 FY15. The Company’s non-GAAP diluted net income per ADS increased by 40.3% to RMB10.17 (US$1.46) in Q4 FY16 from RMB7.25 in Q4 FY15. The Company’s earnings numbers comfortably surpassed market estimates of U$1.03 per ADS.

Segment Results

Live streaming revenues from the YY Live segment in Q4 FY16 was RMB1.88 billion (US$271.3 million) and live streaming revenues from the Huya segment in Q4 FY16 was RMB334.3 million (US$48.2 million). The Company’s revenues from online games were RMB125.4 million (US$18.1 million) in the reported quarter compared to RMB172.4 million in the corresponding period of 2015, which primarily reflected the continued softness in China’s web game market. YY’s revenues from membership were RMB74.7 million (US$10.8 million) in Q4 FY16 compared to RMB80.8 million in the corresponding period of 2015.

For Q4 FY16, Other revenues, mainly including revenues from the Company’s online education platform and online advertising revenues, totaled RMB65.9 million (US$9.5 million) compared with RMB81.4 million in Q4 FY15.

Balance Sheet & Cash Flow

As of December 31, 2016, the Company had cash and cash equivalents of RMB1.58 billion (US$227.5 million) and short-term deposits of RMB3.75 billion (US$540.3 million). For Q4 FY16, net cash from operating activities was RMB996.5 million (US$143.5 million). For the full year of 2016, net cash from operating activities was RMB2.42 billion (US$348.7 million).

Net income attributable to YY Inc. for FY16 increased by 47.5% to RMB1.52 billion (US$219.5 million) from RMB1.03 billion in FY15. The Company’s non-GAAP net income attributable to YY Inc. for FY16 advanced 38.0% to RMB1.68 billion (US$242.1 million) from RMB1.22 billion in FY15.

Diluted net income per ADS for FY16 increased to RMB26.40 (US$3.80) from RMB17.96 in the prior year. Non-GAAP diluted net income per ADS for the reported period increased to RMB28.98 (US$4.17) from RMB21.18 in the prior year.

Business Outlook

For Q1 FY17, the Company expects its net revenues to be between RMB2.2 billion and RMB2.3 billion, representing a y-o-y growth of approximately 33.4% to 39.5%.

Stock Performance

At the closing bell, on Friday, March 24, 2017, YY Inc.’s stock slightly dropped 0.75%, ending the trading session at $46.30. A total volume of 1.07 million shares were traded at the end of the day, which was higher than the 3-month average volume of 962.76 thousand shares. In the last month and previous three months, shares of the Company have rallied 1.27% and 7.62%, respectively. Moreover, the stock surged 17.45% since the start of the year. Shares of the company have a PE ratio of 12.62 and have a market cap of $2.59 billion as per its last closing price.

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