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New Street Research Insights

New Street Research

Research is provided by our team of experienced analysts. Our work is idea driven, based on independence of thought, sector expertise, and firmly focused on fundamentals and valuation of telecoms and internet names globally. New Street is headquartered in London with offices in New York, Singapore and Australia. 

New Street Research is an independent, partner-owned, research firm specialising in equity and debt research. Our equity research embraces the following sectors:

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Japan Telecoms
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We also provide debt research on:
Pan European Telecom Services and Cable

Thematic (Sector/Industry)

China Internet software and services / Thematic (Sector/Industry)

<p>New Street Research has been positive on online video in emerging markets (see <a href="https://www.smartkarma.com/insights/em-telcos-video-growth-drives-an-em-wireless-growth-inflection" target="_blank" data-smartkarma-citation="insights:14384">EM Telcos: Video Growth Drives an EM Wireless Growth Inflection)</a>. In China, the business model is more developed with live broadcasting (LB) recognized as an interactive video format. However, its significance as a major monetization method for video traffic has been underappreciated by the market.</p><p>With an estimated $6bn revenue in FY17, LB user tipping has overtaken advertising and subscription as the largest revenue channel for the overall online video sector in China with strong momentum driven by growth from specialized live broadcast service providers, social networks, and short-form video platforms that use LB for monetization. Confusion over the LB model has led to concerns on future growth, pressuring sector valuations. <a href="https://www.smartkarma.com/profiles/1921" target="_blank" data-smartkarma-citation="accounts:1921">Yunhan Zhu</a> believes this should change as companies with material exposure continue to deliver strong revenue and profit growth. We like both <a href="https://www.smartkarma.com/entities/285" target="_blank" data-smartkarma-citation="entities:285:1">YY Inc (YY US)</a> and <a href="https://www.smartkarma.com/entities/26075" target="_blank" data-smartkarma-citation="entities:26075:1">Momo (MOMO US)</a>.  Turmoil post results in YY's share price seems to be related to buy side disappointment over 1Q guidance. We prefer to focus on the 2018 guidance which remains as expected.</p><p style="text-align: center;"><em>Video revenue by business model - user tipping now the key revenue driver</em></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/046/357/original/LB%20video.jpg?1520388236" class="editor-image img-responsive" data-smartkarma-image-id="46357"></figure><div class="content-caption">Source: New Street Research</div>

New Street Research has been positive on online video in emerging markets (see EM Telcos: Video Growth Drives an EM Wireless Growth Inflection). In China, the business model is more developed with live broadcasting (LB) recognized as an interactive video format. However, its significance as a major monetization method for video traffic has been underappreciated by the market.With an estimated $6bn revenue in FY17, LB user tipping has overtaken advertising and subscription as the largest revenue channel for the overall online video sector in China with strong momentum driven by growth from specialized live broadcast service providers, social networks, and short-form video platforms that use LB for monetization. Confusion over the LB model has led to concerns on future growth, pressuring sector valuations. Yunhan Zhu believes this should change as companies with material exposure continue to deliver strong revenue and profit growth. We like both YY Inc (YY US) and Momo (MOMO US).  Turmoil post results in YY's share price seems to be related to buy side disappointment over 1Q guidance. We prefer to focus on the 2018 guidance which remains as expected.Video revenue by business model - user tipping now the key revenue driverSource: New Street Research

China Online Video - Live Broadcasting Is a Powerful Monetization Tool for YY Inc and MoMo