-=YY (YY) reported earnings on Mon 4 March 19 (a/h)

YY beats by $0.04, beats on revs; sees Q1 revs +23.4-28% y/y

• Reports Q4 (Dec) earnings of $1.87 per ADS, excluding non-recurring items, $0.04 better than the S&P Capital IQ Consensus of $1.83; revenues rose 21.2% year/year to $675 mln vs the $651.56 mln S&P Capital IQ Consensus.
• For the first quarter of 2019, the Company expects net revenues to be between RMB4.01 billion and RMB4.16 billion, representing a year-over-year growth of 23.4% to 28.0%, without giving effect to the acquisition of Bigo Inc.
• Co announced its recent acquisition of the remaining approximately 68.3% of all the issued and outstanding shares of Bigo from the other shareholders of Bigo, including Mr. David Xueling Li, Chairman and acting CEO of YY, for an aggregate purchase price of US$1,452,778,383, comprising of US$343,061,583 in cash, 38,326,579 Class B common shares of YY issued to Mr. Li and 313,888,496 Class A common shares of YY issued to Mr. Li and other selling shareholders of Bigo.

At highest levels since August after beating consensus on Q4 EPS and revs (of US$675.0 mln) and guiding for net revenue growth of +23.4-28.0% year/year for Q1. Live streaming revenues increased +30.4% year/year in the quarter, driving total revenue growth. Co also announced its recent acquisition of the remaining approx. 68.3% of shares of Bigo for an aggregate purchase price of US$1.45 bln in cash and shares, and in its earnings press release, co noted its recent entrance into a strategic partnership with Shanghai Chuangsi, owner of one of China's leading game platforms; under the agreement, co will obtain 30% equity interest of Shanghai Chuangsi by injecting its online game business into Shanghai Chuangsi. Leads generally strong performance among Chinese mid-cap stocks.

New IPOs - when to buy?

Brand-new IPOs may offer future potential, but they can be tricky to navigate in the short run.

Those that go public with much fanfare often see a big, first-day pop, like LinkedIn (LNKD) (109%) and Twitter (TWTR) (73%), before coming back down to earth. That can make finding an entry tough, since a hot stock could keep shooting higher or drop right after the debut, a la Facebook (FB).

That's why it may be prudent to wait for a consolidation. Some IPOs pause shortly after their debut. A so-called IPO base can be shorter in length than the five- or six-week minimum, respectively, for a flat or cup base.

Michael Kors (KORS) trended mostly higher the first five sessions after jumping 21% its first day, Dec. 15, 2011. It then paused the next three weeks, giving prospective buyers a chance to get in. The first true base didn't start until March.

Coupons.com (COUP) surged 88% to 30 from its offer price on March 7. It hasn't done much since, trading mostly between 26 and 31. The Mountain View, Calif.-based digital coupon provider hasn't yet turned an annual profit, though it posted its first quarterly profit in Q4.

Its debut comes nearly eight months after that of rival RetailMeNot (SALE), which rose 32% from its IPO price and is now up more than 30% from that day's close. It had rallied as much as 76%. The company has made money since 2010.

YY (YY), which went public on Nov. 21, 2012, shows the potential of recent new issues. It saw a modest 8% rise in its Nasdaq debut. Shares climbed 35% in the first two weeks before launching into their first consolidation, which spanned seven weeks and offered a first chance for investors.

Another 36% advance ensued before the Chinese Internet stock settled into a six-week cup base, a second opportunity to buy. It cleared its most recent six-week consolidation on Jan. 3 and is up 42% from the buy point.

YY has grown its annual earnings per share the past two years. Earlier this month, it crushed fourth-quarter profit and sales forecasts with triple-digit gains. Analysts expect triple-digit EPS growth to continue in Q1.
The top- and bottom-line performance have helped it attract increasing institutional sponsorship. Forty-three mutual funds and hedge funds took new positions as of Dec. 31, while 23 added to their stakes. Three of the funds owning shares are rated A+.

YY Inc. (YY) started trading on the NASDAQ on 21 November 2012

Chinese social media platform YY Inc. (NASDAQ: YY) visited the NASDAQ Marketsite in Times Square, NYC in celebration of their initial public offering, which occurred on Wednesday, November 21, 2012.

YY is a revolutionary rich communication social platform that engages users in real-time online group activities including online games, karaoke, music concerts, education, live shows and conference calls. As of September 30, 2012, YY had 400.5 million registered user accounts and 393 billion user voice minutes.

Address

Bldg 3-08,Yangcheng Creatve Indstry Zone No.309 Huangpu Avenue Middle,Tianhe Dist
GUANGZHOU, GNG 510655
China

Website 

http://www.yy.com

Key stats and ratios

	Q3 (Sep '13)	2012
Net profit margin	26.35%	10.86%
Operating margin	27.52%	12.55%
EBITD margin	-	16.50%
Return on average assets	24.24%	7.29%
Return on average equity	32.41%	-
Employees	1,298