There is no fundamental reason why DOYU Stock plummeted 2.75% in the current market trading session at the price of $3.89. DOYU is a leading game-centric live streaming platform in China and a pioneer in the eSports value chain.
DOYU Announced Share Repurchase Program
On 30th August 2021, DOYU announced that its board of directors had authorized a share repurchase program. The company can repurchase US$100 million of its ordinary shares during 12 months starting on 30th August 2021. The program is subject to the relevant rules under the Securities Exchange Act of 1934 and insider trading policy. The timing and conditions of the share repurchases will be subject to the requirements under Rule 10b-18 and Rule 10b5-1 of the Exchange Act. The company’s board of directors will review the share repurchase program periodically. They may authorize adjustments to its terms or even suspend or discontinue the program. The company anticipates utilizing its existing funds to fund repurchases under this program.
Second Quarter 2021 Unaudited Financial Results
On 16th August 2021, DOYU published its unaudited financial results for the second quarter ended 30th June 2021. Total net revenue for the second quarter of 2021 was RMB2,336.8 million (US$361.9 million). Total revenue was RMB2,508.2 million for the same quarter of the previous year. For the second quarter of 2021, the gross profit was RMB306.5 million (US$47.5 million). Gross profit was RMB522.9 million for the same period of 2020. The gross margin for the second quarter of 2021 was 13.1%. It was 20.8% for the same quarter of the previous year. This drop resulted from the increase in content costs as well as the decrease in revenues and bandwidth costs.
Loss from operations for the second quarter of 2021 was RMB197.4 million (US$30.6 million). Profit from operations was RMB238.9 million for the same quarter of 2020. DOYU reported a net loss of RMB181.7 million (US$28.1 million) for the second quarter of 2021. Net income was RMB319.3 million in the same period of 2020. Basic and diluted net loss per ADS in the second quarter of 2021 were RMB0.45 (US$0.07) and RMB0.45 (US$0.07), respectively.
CEO of DOYU, Mr. Shaojie Chen, remarked that their core operating metric continued to grow steadily in the second quarter of 2021. Their quarterly average mobile MAUs grew by 3.9% year over year to 60.7 million. They plan to continue expanding their content ecosystem both upstream and downstream. It will help them to cover each link of the game industry value chain. They will bolster their industry leadership through the continuous execution of live streaming and other community strategies, he added.
