Hedgeye China: YY Is A "Hidden Gem"

09/10/19 02:21PM EDT

Below is a brief excerpt transcribed from today's edition of The Macro Show hosted by China Analyst Felix Wang.


It’s a very complicated environment that provides an incredibly exciting and diverse opportunity for investors, IF they know how to navigate the landscape.

However, most approaches to contextualize culture for western markets fall short.

With the brand new launch of Hedgeye China, I look forward to utilizing proprietary big data to provide an edge and pinpoint under-the-radar investment opportunities within the broad and increasingly complex China ecosystem. 

To start us off, a primary idea we're running with is LONG YY. With the stock near two-year lows and the cheapest company by far in my coverage list, it is a hidden gem.  Investors remain skeptical on its overseas livestreaming business segment, titled BIGO (Before I Get Old).

Hedgeye China: YY Is A "Hidden Gem" - 9 10 2019 12 05 36 PM.png YY

BIGO's piling losses in attempting to attract a new base of users are hurting YY's corporate profits.

We think Q2 2019 could mark the bottom on profitability, thus making BIGO's expectations finally beatable.

Hedgeye China: YY Is A "Hidden Gem" - 9 10 2019 12 08 00 PM

In addition, BIGO Live is improving their position within the big revenue markets US and Japan. That’s the opportunity. I’m expecting at last 50% revenue growth within the next couple years on a two year average. 

80% of BIGO’s revenue comes from the overseas consumer. In addition, YY’s other business segment, Huya, is killing it in the esports market and is another growth driver for YY.

Definitely something to keep your eyes on moving forward.

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