Why HUYA Inc – ADR (NYSE: HUYA) stock is rising

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HUYA Inc – ADR (NYSE: HUYA) stock rose over 2.5% in the pre-market session of August 14th, 2019 (as of 7:46 am GMT-4; Source: Google finance) as the company reported a 93.6% growth in the revenue to RMB2,010.5 million (US$292.9 million), from RMB1,038.3 million in the same period of 2018. The company has posted the net income attributable to Huya of RMB121.8 million (US$17.7 million) for the second quarter of 2019, as compared with a net loss attributable to Huya of RMB2,125.4 million in the same period of 2018. Non-GAAP gross margin trended well at 16.9%, up from 16.3% in the second quarter of 2018, benefiting from self-produced content and optimized efficiency in operations. Non-GAAP operating income increased by 104.7% year-over-year with non-GAAP operating margin at 5.8%, compared with 5.5% in the second quarter of 2018.

Why HUYA Inc – ADR (NYSE: HUYA) stock is rising

Moreover, the Average mobile MAUs in the second quarter of 2019 reached 55.9 million, representing an increase of 31.1% from 42.7 million in the second quarter of 2018. Average MAUs in the second quarter of 2019 reached 143.9 million, representing an increase of 57.3% from 91.5 million in the second quarter of 2018 driven by an enhanced partnership with several leading game studios and increased integration in the e-sports value chain. Huya’s focus on mobile also continued to yield results, serving as a robust driver behind the strong topline performance. Total number of paying users in the second quarter of 2019 reached 4.9 million, representing an increase of 46.7% from 3.4 million in the second quarter of 2018

Furthermore, Live streaming revenues rose by 93.7% to RMB1,921.5 million (US$279.9 million) in the second quarter of 2019 versus the same period of 2018, primarily due to the increases in both the number of paying users on Huya’s platform and average spending per paying user. The increase in the number of paying users was primarily driven by the Company’s mobile strategy, diversification of content offerings and continued efforts in converting active users into paying users. The increase in spending per paying user was primarily driven by the enhancement of content attractiveness, the improvement in user experience and upgrade of product features. Advertising and other revenues increased by 91.3% to RMB89.0 million (US$13.0 million) in the second quarter of 2019, from RMB46.5 million in the same period of 2018.

For the third quarter of 2019, Huya expects net revenues to grow between 66.1% and 72.3% year-over-year to the range of RMB 2.12 billion to RMB 2.20 billion.

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