Play station B with yourself: Can user growth and income growth be achieved together?｜ Long China 50 Analysis

The quality of user growth is good, but the income growth cannot be waited.

Text ｜ Wang Yuzheng

Edit ｜ Qiao Yan

Cover Source ｜ icphoto

On September 8th, the second quarter financial report of Station B conveyed several important information:

1. User growth is good. The average monthly active users reached 306 million, an increase of 29%year -on -year, and the average daily active users reached 83.5 million, an increase of 33%year -on -year. In the past two consecutive quarters, the daily active users growth rates were over -monthly active households.

2. The income performance is average. The net revenue was 4.9 billion yuan, an increase of about 9%year -on -year, in line with guidelines and market expectations, but the growth rate was at the lowest level in the past years. The growth rate of advertising and e -commerce revenue has slowed sharply. The revenue of mobile games is negatively increased, and the live broadcast and value -added revenue increased by 28.7%year -on -year.

3. Operation expenses control slightly effective. The market and sales costs of the quarter decreased by 16%year -on -year, and the cost of server and bandwidth units decreased by 37%year -on -year. However, the management and R & D expenses brought about by layoff compensation and merging external studios have increased in a short time.

Image source: B Station Finance Report

4. Operating losses hit a new high, worse than market expectations. The operating loss in this quarter was RMB 2.19 billion, and the same period in 2021 was RMB 1.52 billion.

5. The gross profit margin is innovative. The gross profit margin in this quarter was 15%, lower than 16%in the previous quarter and 22%in the same period last year.

Half a year ago, Chen Rui, CEO of station B, said at the Q421 conference call that "income growth will become a more important job than in the past this year."

"In the past, between the" user growth 'and' income growth ", the proportion of distribution is seven or three, that is, 70 % of user growth, and 30 % of income growth. In the planning of this year, we will adjust the distribution ratio. Change to five or five. The growth of income will become a more important job than in the past this year. "Chen Rui said.

But in the past half a year, the growth of users at Station B was still full of healthy vitality, but income growth was faltering. According to Chen Rui's "two plans", Station B will reach 400 million MAU in 2023. At present, there is still 100 million from this goal. In addition, Station B in 2024 should achieve NON GAAP profit and loss balance, and the current goal is still 2 billion.

The dawn of the user growth goal is already in front of the eyes, but the income growth goal is high. Faced with the increasingly conservative secondary market, station B may take out a more radical attitude than five or five in the next two and a half years to face the pressure of income growth.

Many business undertake objective pressure, but the next quarter is expected to recover

The advertising business of station B was previously low, and it was able to achieve high growth in the absence of the environment, but this quarter greatly slowed down.

In this quarter, the advertising revenue of station B was 1.158 billion yuan, a year -on -year increase of 10.4%. Half a year ago, its growth rate was as high as three digits. The results of the same period last year were 201%, and the previous quarter was 45.6%.

Picture source: Changqiao Dolphin Investment Research

Station COO Li Yan acknowledged the impact of the depression of the overall advertising industry on the business. "The global macroeconomic changes and the epidemic repeatedly affected the advertising industry, and its negative impact was significant in the short term. We judge that in the middle and long periods of the next one to two years, there will still be a continuous impact. The budget is significantly shrinking, and the launch will be more cautious. "

Regarding the boosting advertising revenue in the second half of the year, Li Yan showed investors the "two central Taiwan": a large middle platform is the company's commercialization, and its goal is to continuously improve the efficiency of flow monetization. It is the advertising business. Infrastructure. Another Zhongtai is the company's small and middle stage, which mainly provides UP owners' income strategies and services.

Specifically, one is the large middle stage of the flower fire platform, and the other is a small middle stage including live broadcast. At the end of last year, Station B established a live e -commerce business group, and launched the "Little Yellow Car" function in some live broadcast rooms, allowing users to watch live broadcasts while ordering.

Although station B gave a revenue guidance below the expected revenue in the third quarter (56-5.8 billion), the company's executives still showed strong confidence in the advertising business at the call meeting.

"Q3 Due to the improvement of advertising efficiency, the iteration of the integrated marketing plan, and the economic recovery, it is estimated that the flowing water can achieve a year -on -year increase of about 20%." Li Yan said. In addition, Station B will further open the platform ecology to industry partners in Q3. "We have reached preliminary cooperation with Taobao, Tmall, JD.com, and Pinduoduo e -commerce platforms to actively try to place native advertisements on station B and the main grass -growing grass advertisement."

In addition, station B has high hopes for the commercialization of vertical video story-modes. In this quarter, Story-Mode's VV growth rate was as high as 400% year-on-year, far higher than the growth rate of 53% of PUGV and the overall platform of the platform.

This information stream of Story-Mode is a natural "advertising video display cabinet". When you browse the video on the homepage of the mobile phone side B, the area of ​​each video information is only 1/8, and the advertising video is only displayed by the cover of 1/8 as ordinary videos. Users who do not want to watch advertisements can completely ignore it. But Story-Mode is similar to the declining vertical video that has no restrictions on Douyin, which can bring better exposure to advertising videos.

Li Yi revealed that Story-Mode's ECPM (the advertising income that can be obtained per thousand displays) is higher than other types of advertising ECPM. In this quarter, the revenue of station B was rare year -on -year and fell as high as 15%. Under the control of the game version number control and strict minor protection supervision, the decline in the game business is also expected. However, station B did not give up the acquisition of new game studios, which brought rising research and development costs in the short term and dragged down the overall profit.

Live and large members' revenue was 2.1 billion yuan, a year -on -year increase of 29%. Although it is the best performance in this quarter, its growth rate is also at the lowest level over the years.

E -commerce business revenue was 601 million yuan, an increase of 4%year -on -year, and the growth rate was also a new low over the years. Mainly because the epidemic affects e -commerce logistics.

The quality of user growth is good, but the income growth can no longer wait

Only two and a half years before the Non GAAP profit and loss balance in 2024. At present, we have not showed reassuring income growth.

At present, in terms of retaining data, the performance of new users is not bad: the growth rate of the user interaction of station B exceeds the growth rate of VV, the VV growth rate exceeds DAU growth, and the DAU growth rate exceeds MAU growth rate. This means that most of the new users are users who are faithfully opened daily, are willing to retain to watch videos, and are willing to interact.

However, at the level of paid, the ARPU (single user paid amount) at station B is decreasing. In this quarter, ARPU was 38 yuan, a year -on -year decrease of 16%, the lowest level in history. Three years ago, this number was more than 60 yuan. In other words, although "breaking the circle" brought more new users, the user's payment level was lowered.

Picture source: Changqiao Dolphin Investment Research

If the user's growth is temporarily put, can the trouser belt be profitable? It should be possible.

This year's Q1 and Q2, the Chinese long video industry that has been considered "never profitable" has created a miracle -iQiyi connected to two quarters with a decline in total revenue, because of its cost of cost Driven.

But at present, the intensity of "cost reduction and efficiency" station B is still weaker than other companies. In this quarter, although marketing costs fell year -on -year, Station B was still in the collective "holiday" of the investment department of the Internet manufacturer. It has repeatedly invested in external game studios, which has caused 70%of the R & D expenses of short -term personnel to accumulate.

However, the largest cost of the largest head -the division expenditure to the UP master is still controlled. The income sharing expenditure of station B in this quarter was 2.068 billion yuan, a decline in three consecutive quarters. At the end of the first quarter, station B adjusted the video incentive rules, which affected some of the main revenue of the UP. In the second quarter, the main number of monthly active UPs fell from 3.8 million in the first quarter to 3.6 million, which is the first time that the main number of B Station UP declines.

In the future, under the pressure of profit, Station B should reduce expenditure in all aspects, and will also affect user growth accordingly. "400 million users in 2023" and "Balancing Balance of 2024" are the two targets that are difficult to achieve together. Station B will play against themselves in this game.

Let's "share

The quality of user growth is good, but the income growth can no longer wait

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