Huya and DouYu Combine for $740M in Q1 Revenues Prior to Planned Merger – The Esports Observer

Chinese live streaming platforms Huya and DouYu published their quarterly earnings for the first quarter of 2021, generating combined revenues of ¥4.76B RMB ($740M USD). Both companies share Tencent as their largest shareholder, which initiated a merger process between the two companies last year. The business combination is expected to close during the first half of 2021 but is currently subject to approval by the State Administration for Market Regulation, a Chinese antitrust agency. 


Huya generated net revenues of ¥2.61B ($406M) for the period ended March 31, which marks an increase of 8% compared to ¥2.41B ($374M) in Q1 2020. 

Huya’s major source of revenues was its live streaming business, which generated ¥2.39B ($371M) or roughly 92% of total revenues. The company attributed the increase in live streaming revenues of 5.2% primarily to an increase in the average spending per paying user on Huya Live. 

The company recorded an increase of 18.3% to 172.9M in average monthly active users (MAUs) on its platform during the first quarter of the year. Mobile users, measured in average mobile monthly users, increased by 1.1% to 75.5M from 74.7M in the first quarter of 2020. Huya’s total number of paying users slightly decreased to 5.9M in Q1 2021, down 3.3% from 6.1M in the first quarter of 2020. 

In total, Huya ended the first quarter of 2021 with a net profit of ¥186M ($28.9M), up 8.4% year-over-year from ¥171M ($26.6M) in the same period of last year. 


DouYu generated net revenues of ¥2.15B ($334M) during Q1 2021, which marks a decrease of 5.7% year-over-year compared to ¥2.28B ($354M) in Q1 2020. 

DouYu’s major source of revenue came from its live-streaming segment, which was down 5.4% year-over-year to ¥2B ($311M) for Q1 2021, representing roughly 93% of the company’s total revenues. According to DouYu, this decline in revenues was primarily driven by “the reversion of paying users’ consumption of the virtual items to that of the pre-pandemic level, as the pandemic was gradually brought under control in China. This decline was partially offset by our implementation of more effective operational strategies, which helped improve the participation levels and paying behaviors of key paying users on our platform in the period.” 

In its earnings report, the company recorded 192M average MAUs for the period, up 21.3% from 158M MAUs in the same period of 2020. Average mobile MAUs in the first quarter of 2021 increased by 4.5% to 59.1M from 56.6M in Q1 2020. However, the number of quarterly average paying users dropped by 9% to 7M in the period. 

In total, DouYu ended the first quarter of 2021 with a net loss of ¥102M ($15.9M), compared to a net profit of ¥255M ($39.6M) in the same period of last year. 

In October 2020, Huya entered into an agreement with its Chinese competitor DouYu to merge the two businesses. Huya will acquire all outstanding shares of DouYu in a stock-for-stock merger at an exchange ratio of 0.73 shares of Huya per share of DouYu. The merger’s completion will result in DouYu becoming a privately-held and wholly-owned subsidiary of Huya, therefore, being delisted from the NasdaqGS. Tencent Holdings will control 67.5% of the new company’s voting power once the merger is completed. 

In December last year, China’s State Administration for Market Regulation (SAMR) announced that the government has started to investigate the merger between DouYu and Huya. The investigation follows the new reformation of China’s antitrust law since January of this year, adding new restrictions for high technology and internet companies. 

Note: The Esports Observer used the exchange rate in effect as of May 19 at a rate of 6.43628 RMB to 1 USD for currency conversions in this article.

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