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YY Inc. Message Board

  • patient_lt_investor patient_lt_investor Aug 13, 2013 6:41 PM Flag

    YY Hits the Sweet Spot in China

    YY could be a 'monster' stock. Chinese people have a great loyalty toward their own products, and there are many Chinese who will buy YY products. Here is a good article on YY (Note: it is too long for one topic, so, I'll continue this article in my reply to this post):

    YY Inc. Is Hitting China's Sweet Spot Of Mobile Needs

    By DONALD H. GOLD, INVESTOR'S BUSINESS DAILY

    If you think mobile technology is changing your life, consider what it's doing in China.

    The world's biggest emerging market, with 1.3 billion people, is very much on the move. Landlines aren't very useful when millions are chasing jobs from one city to another. Shopping, apartment-hunting and everyday searches are just a few of the activities that need some centralization for China's consumers.

    China boasts the world's largest Internet population, 513 million people — and still growing.

    Meanwhile, China's smartphone shipments totaled 78 million units in Q1, a staggering 117% growth over the same period a year earlier, according to industry tracker IDC.

    Now consider IDC's outlook for China: "In 2017, smartphone shipments will exceed 460 million units to reach a market size of RMB 740.5 billion (USD 117.8 billion)," IDC said June 18.

    One company is hitting the sweet spot of China's mobile needs. YY (YY) runs a popular social-networking platform that allows real-time voice, text and video communications. Online gaming, music and ad sales made up the bulk of 2011 revenue.

    YY is about more than just two friends having an online chat. Its platform creates virtual communities. You'll find concerts broadcast over YY's platform, with thousands "attending" the event from their home PCs or — increasingly — anywhere.

    Continued in reply to ths post

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    • Continued:

      YY won a coup when it got the rights to carry the 2013 season of China's popular "Happy Boy Show" singing talent competition.

      But mobile is YY's booster rocket. Consider this info from CFO Eric He, speaking on the Aug. 2 earnings conference call:

      "The transition to mobile devices is where we saw our largest increase of MAUs (mobile monthly active users) over the past quarters, which increased by 16% quarter over quarter and 96% year over year."

      YY doesn't charge a fee for its mobile app. But mobile users can more easily — and frequently — get to YY's best money-making spots, including gaming and music. And, of course, those users see more ads. In China, as in the U.S., eyeballs are valuable.

      YY's earnings in the past three quarters soared 80%, 156% and 169%. Sales have grown at triple-digit pace for years, since well before its November 2012 IPO.

      The stock has been screaming since it broke out from a nine-week consolidation May 6.

      YY's chart shows a three-weeks-tight add-on pattern. Normally the entry would come in at the new high, 48.10. But an unconventional buy point appears at 44.77.

      Either way, this is a high-risk add-on pattern because it appears so far above the most recent base's entry, 20.99.

 
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