China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

MD, Blue Lotus Research Institute

Gu Jun, CFA

Equity Bottom-Up

<p>● We see YY is going to face more user and performer drainage issues in 2018 because of its aging community and the increasingly competitive landscape.<br>● We estimate YY’s 1Q18 is in-line, while 2Q guidance might be weak.<br>● We cut prediction for 18/19 Non-GAAP EPS to US$7.4/8.5, which are 6.2%/13.9% below the consensus. Maintain HOLD and cut TP to US$95.</p>

● We see YY is going to face more user and performer drainage issues in 2018 because of its aging community and the increasingly competitive landscape. ● We estimate YY’s 1Q18 is in-line, while 2Q guidance might be weak. ● We cut prediction for 18/19 Non-GAAP EPS to US$7.4/8.5, which are 6.2%/13.9% below the consensus. Maintain HOLD and cut TP to US$95.

YY Inc. Facing User and Performer Drainage, Cut TP to US$95

JOYY

YY Inc. Facing User and Performer Drainage, Cut TP to US$95