China Live Broadcasting:dbAccess China conference,Live broadcasting

We invited China live broadcasting leading players YY and Momo to our dbAccessChina conference 2018 in Beijing. Both companies shared the recent businessupdate and strategic plans in 2018. YY indicated that 2018 should have a richpipeline of new feature launch; every quarter should have some new features tolaunch. The company aims to re-shape YY Live, allowing the young generationto always have the chance to discover new things whenever open up the app.

    There should be more table games and PK games to launch in 2018. The strongfeature, Happy Contest, will be upgraded in 2018. The company sounds confidentat overall user growth and pay ratio improvement. The marketing plan seems tobe aggressive at promoting short form video this year. Huya is facing intenseshort term competition on top host, yet the revenue and user growth is still robustdriven by hit mobile game titles.

    Momo revealed that one of the recent focuses is to enhance the relationship withguilds, encouraging more talent recruitment and the creation of quality contents.

    The company imagined 1.5-2% impact on gross margin in 4Q17 due to incentivesto guilds during year end ceremony. The company expected better monetizationon VAS features in 2018. Momo reiterated its top priority: user base expansion.

    The company has made some changes on marketing team KPI since 3Q17 in orderto optimize the marketing methodology. The marketing team now is looking at alonger term retention (vs 7-day retention before) and pay ratio rather than simpleregistration. The 2018 marketing strategy, therefore, should be more effective,with less spending on branding and more on performance-based channels.

    We plan to host a conference de-brief call this Friday at 10AM EST on Chinainternet. Conference ID: 4992549. Dial-in: 800-309-8606 (US); 020-3107-0289(UK); 800-8700-169 (China); 3011-4522 (Hong Kong); 6622-1010 (Singapore).

    Please contact your DB representative for local dial in.

    Please refer to detailed conference takeaways in the inner page.