This Live Streaming Company’s Share Price Soared 170% in 2 Months: Should Investors Take a Second Look?

It’s not often that you hear of share prices more than doubling in a short space of time.

But that’s what happened with 17LIVE Group (SGX: LVR).

The live-streaming company saw its share price leap by 170% in just a little under two months, going from S$0.43 to the current S$1.16.

Should investors sit up and pay attention? Can the company’s share price continue to outperform?

Read on as we dig deeper into 17LIVE’s business and prospects.

Brief background of 17LIVE

17LIVE is a pure-play live-streaming platform in Japan and Taiwan.

The group’s business divisions include Liver live-streaming, V-liver live-streaming, and in-app games and live commerce.

Liver and V-liver involve the use of influencers who create digital, virtual avatars through 17LIVE’s app and broadcast this to their fans.

The group then earns revenue from gifts and items purchased by fans (customers) for their favourite idols and influencers.

17LIVE was listed through a special purpose acquisition company (SPAC) back in October 2023 when Vertex Technology Acquisition Company (VTAC) announced a business combination.

A weak set of financials

17LIVE recently released a downbeat set of earnings for the first half of 2024 (1H 2024).

Revenue fell by a third year on year from US$151 million to US$101.2 million.

Liver live-streaming revenue tumbled from US$146 million to US$92.4 million but this was offset by a more than threefold year-on-year rise in V-Liver live-streaming revenue at US$4.8 million.

17LIVE saw its operating profit plunge from US$13 million in 1H 2023 to just US$1.3 million for 1H 2024.

Net profit for the live-streaming company came in at US$1.9 million for 1H 2024.

On the flip side, the company held US$85.6 million of cash and cash equivalents with zero debt.

17LIVE also generated a negative operating cash flow of US$12.9 million compared with the positive operating cash flow of US$4 million in the prior year.

Launch of 17LIVE Forward Strategy

Despite the weak results, management announced the launch of a comprehensive growth plan with initiatives that will lift the company to the next level.

This strategy is anchored on three pillars – the enhancement of 17LIVE’s platform through advanced technology and its diverse community of streamers, the diversification of its revenue stream, and forging of strategic business partnerships.

Source: 17LIVE 1H 2024 Presentation Slides

CEO Jiang Honghui believes that the company can enhance its unique value proposition in the live-streaming industry to obtain new users.

At the same time, 17LIVE will also focus on live streamer acquisition and retention while developing a holistic V-Liver business model.

The company has identified the V-Liver segment as one of its near-term growth drivers.

17LIVE will diversify the content types on its platform while using technology to lower barriers to entry for new users.

Meanwhile, the company will also expand its intellectual property (IP) portfolio to diversify its monetisation options beyond live streaming.

Some of these methods include talent management and merchandising fees.

Collaborations with key partners; expanding its reach

To achieve its objectives, 17LIVE has signed two memoranda of understanding (MOUs) with key players in the region.

One of them is mm2 Asia Limited (SGX: 1B0), a media entertainment and content company, and the other is AppWorks Ventures Co Ltd, a Taiwan-based venture capital firm.

These MOUs will help the company enhance its entertainment offerings and production capabilities while also opening up more investment opportunities within Southeast Asia.

In another expansionary move, 17LIVE Japan Inc launched a new cross-border live commerce service called “HandsUP Crossborder” on 19 August.

This new service will target the East Asia region, including Taiwan, and enable businesses to match with sales experts and influencers who have significant influence in the region (KOLs).

A large and growing total addressable market

There is a significant addressable market for 17LIVE’s services that should act as a strong catalyst for future growth.

The global anime market, which was valued at US$31.2 billion last year, is expanding at a compound annual growth rate (CAGR) of 9.8%.

Japan is the market leader, accounting for more than 40% of global anime revenue.

The V-Tuber market, which is a subset of V-Liver, is also growing rapidly and is valued at US$500 million at present, according to Yano Research Institute.

Analysts project substantial growth potential for the live streaming market with a CAGR of 23% between 2024 to 2030.

This growth is fuelled by technological advancements in augmented and virtual reality.

17LIVE is confident of capturing opportunities within this space to grow its V-Liver streaming revenue.

The forecast for Asia’s media and entertainment industry, which includes KOLs and character IP, is forecast at US$460 billion by 2027.

With such a large market, the future seems bright for the company if it can snag opportunities to grow its business.

Get Smart: Time will tell

It appears that 17LIVE has a huge total addressable market for its live-streaming services.

However, investors should note that there is also competition from other video-sharing sites such as YouTube and other live-streaming outfits.

Time will tell whether 17LIVE manages to grow its influencer and customer base so that it can report stronger financial numbers.

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Disclosure: Royston Yang does not own shares in any of the companies mentioned.