FAST NEWS: DouYu records fourth consecutive profitable quarter on cost-cutting

The latest: Livestreaming game platform DouYu Holdings Ltd. (DOYU.US) on Thursday announced a net profit of 76.4 million yuan ($10.7 million) for the third quarter, marking its fourth consecutive quarterly profit, and reversing a 6.6 million yuan loss a year earlier.

Looking up: The company’s cost of revenue decreased by 24.6% year-on-year to 1.17 billion yuan as a result of ongoing cost-control measures, with revenue sharing fees and content costs plummeting by nearly 30% to 927 million yuan.

Take Note: The company’s livestreaming revenue decreased by 32.5% to 1.15 billion yuan, dragging down total revenue by 24.1% to 1.36 billion yuan due to the weak spending.

Digging Deeper: DouYu is one of China’s major online livestreaming game platforms, founded by Chen Shaojie in 2014. The Tencent-backed (0700.HK) company went public on the Nasdaq in 2019. But as it came under pressure from rivals like Huya (HUYA.US), Kuaishou (1024.HK), Bilibili (BILI.US; 9626.HK) and TikTok, the company ended up getting in trouble for having pornographic and other unsavory content on its platform and was ordered to clean it up. Last month, Chen was arrested for being involved in the establishment of an online gambling platform, and is still under detention.

Market Reaction: Shares of DouYu rose 2.4% to $0.739 on Thursday following the release of the quarterly report, near the lower end of their 52-week range.

Translation by A. Au

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