Recent earnings from online retailers have shown a slowdown in Chinese consumers. Joyy Inc. could see its latest earnings suffer from the same problem.
YY – Daily Chart
YY stock has found strong resistance at the $35 level and may see further lows with support at $31.74.
Joyy Inc. was set to release second-quarter earnings late on Tuesday, the first since announcing a leadership transition.
The Company said a month ago that Ms. Ting Li, then Director and Chief Operating Officer of the Company, would succeed Mr. David Xueling Li as Chair of the Board and Chief Executive Officer. Xueling Li will continue serving as a board member, the Company said.
Mr. David Xueling Li stated, “JOYY has become highly globalised, cultivating an engaging and vibrant user community worldwide. With robust localised operations and continuous innovation, we are poised to further diversify our revenue streams and seize new growth opportunities. The Board and I believe that this is the optimal time for leadership transition”.
During the first quarter, JOYY’s revenue was US$564.6 million. The Company’s core business segment, BIGO, continued to see a sales recovery trend, generating revenues of US$505.2 million, a year-over-year increase of 8%. JOYY recorded a net profit of US$ 45.3 million.
Recent earnings from e-commerce retailers have shown a stretched Chinese consumer, which could hurt the Q2 release from Joyy.
Analysts were disappointed to see pressure on budget retailer PDD Holdings, an early beneficiary of bargain-hunting themes. The latest earnings from Joyy could also be a struggle if consumers struggle to make ends meet.
“Backed by our robust cash flow and strong financial position, we remain committed to returning value to our shareholders,” management said in Q1. In the first quarter of 2024, we repurchased an additional US$54.5 million worth of our shares, reflecting our confidence in the Company’s long-term prospects”.
The Q2 results are coming after the stock price has hit a resistance barrier, and further weakness is possible this week.
