YY Inc’s Record Q3 2013 Earnings Fail To Impress The Market

YY Inc. (NASDAQ:YY), the Chinese online media/gaming company has been among our top picks for one quarter now. The company reported its Q3 2013 numbers on 6th November after market close. The company reported a phenomenal quarterly performance which saw positive movements in all the business indicators.

YY Inc. 2013 Q3 performance

YoY Revenue growth 113%
Operating profit YoY growth 239%
Operating margin change 10.2%
Net income YoY growth 267%
Net income margin change 11.1%

The company saw topline growth accompanied by margin expansions in operating Income as well as net Income. The operating profit and net profit as a percentage of revenues increased 10.2% and 11.1% respectively. The GAAP-earnings per ADS jumped over 200% to 40 cents on the back of strong growth and margin expansions. The company trumped Q3 2013 analyst consensus earnings estimate of 27 cents by a 30% margin.

YY Inc.: Q4 2013 guidance

The company guided Q4 2013 revenue to be in the range of RMB 510 to RMB 520 million. The midpoint of the range at RMB 515 million represents a 93.6% growth over Q4 2012 and 8.6% higher than Zacks consensus analyst estimates of RMB 474 million.


The stock price of the company spiraled downwards after seeing pre-market gains touch 7%. The regular trading session on 6th November saw YY Inc’s stock fall by 11%. We believe the market reaction has been largely due to the negative sentiment surrounding Chinese companies following the recent controversy regarding NQ mobile, the Chinese mobile security company. We are positive about the stock bouncing from the lows it hit in yesterday’s trading session.

To see YY Inc’s latest stock price movement, click here (NASDAQ:YY)

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Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. The author may not be a certified/registered investment advisor, and the opinions expressed should not be treated as investment advice. Buying and selling of securities carries the risk of monetary losses. Readers/Viewers are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions. Neither Amigobulls, nor the author have any business relationship with any of the companies covered in this post.

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