DouYu (DOYU), a leading game live-streaming platform, recently announced a major leadership shake-up.
On August 7, DouYu disclosed that founder Chen Shaojie had resigned as CEO and board director for personal reasons. In his place, the 95s-generation executive Ren Simin was appointed as the sole CEO and board chairwoman.
Looking back at 2023, Chen Shaojie was arrested by public security authorities on suspicion of running a gambling operation. Legal experts estimate his potential sentence could range from 5 to 7 years. Although DouYu is gradually recovering from the fallout of the founder's arrest, the company still faces significant performance pressure.
In the first quarter, DouYu reported a "profit increase without revenue growth" scenario: quarterly revenue was 822 million yuan, down 13.2% year-over-year, while net profit hit 27.4 million yuan, turning around from a loss. Additionally, the average MAUs and monthly paying users for its voice-based social networking services both declined.
Where to start?
With Ren Simin now at the helm, her responsibilities remain heavy. On August 7, DouYu announced management changes, appointing co-CEO Ren Simin as the sole CEO. She will also serve as board chairwoman and join the compensation and nominating committees. Separately, Gao Jie was named investment vice president and board director, effective August 7.
Public records show Ren Simin joined DouYu in June 2021 as vice president of its domestic operations, overseeing project management, business compliance, and streamer management. After Chen Shaojie's arrest in November 2023, she became part of the interim management committee and was later appointed as co-CEO in January 2024. This latest promotion marks her full control of the company.
In contrast, Gao Jie is a veteran employee, joining DouYu as one of its first staff in 2014. He served as investment manager from 2017 and investment director by 2018, bringing extensive experience.
The announcement also stated Chen Shaojie resigned voluntarily, effective August 6, with no disputes or disagreements, and that the changes won't materially impact business operations.
Why just losing on the "gambling" front?
Chen Shaojie, once a billionaire from a "gaming addict" background, fell due to gambling. Born in 1984 in Jinan, Shandong, he dropped out of college in his first year, betting on a bleak future. In 2006, he moved to Wuhan, using his gaming expertise to land a job developing a game platform, where he met Zhang Wenming. They co-created the "Zhangmenren" platform, sold to Shanda Games in 2009, earning his first fortune.
With that capital, in 2010, Chen acquired AcFun, a pioneer in anime streaming. As live streaming surged, he launched the "Shengfang Song" channel on A站, later spun off as DouYu in 2014. That year, it secured 20 million yuan in angel funding from Cai Dongqing of Alpha Group, followed by $20 million Series A from Sequoia Capital.
Chen's bold gamble: burning 15 million yuan of that investment in a month to sign top streamers, triggering a costly "cash war" that nearly bankrupted DouYu. In 2016, DouYu raised $100 million from Tencent and others, helping it survive and become a top game streaming platform. It listed on Nasdaq in July 2019, with Chen's wealth reaching 2.5 billion yuan that year and 5.5 billion by 2020.
But fate turned. In October 2023, rumors emerged of a major streaming platform head's arrest for gambling. Soon, Chen was reported missing. On November 21, 2023, DouYu confirmed his arrest by Chengdu police for suspected gambling. In April 2024, reports suggested he was released on bail, with legal experts estimating a 5-7 year sentence.
Why only 10 ASX 200 shares?
As the company's leadership shifts, DouYu is escaping losses. In Q1, net profit was 27.4 million yuan, reversing a 79.6 million yuan loss a year earlier. Gross profit rose 14% to 129 million yuan, and gross margin expanded 3.7 percentage points to 15.7%, driven by lower revenue-sharing fees, content costs, and bandwidth expenses.
However, revenue continued to decline. Total revenue was 822 million yuan, down 13.2% year-over-year. Live streaming revenue fell 18.5% to 460 million yuan due to reduced promotions and consumer spending, while innovation, advertising, and other revenue dropped 5.4% to 362 million yuan, partly due to lower voice-based social networking service revenue, offset by growth in game membership and ads.
Voice-based social networking service revenue was 256 million yuan, down 11.82% from 290 million yuan a year earlier. Average MAUs for this segment fell 36.68% to 315,600, and monthly paying users dropped 25.81% to 61,500.
Ren Simin stated, "In the coming quarters, we expect to further enhance our content offerings across events and programs to improve live streaming quality and platform appeal. We also plan to explore DouYu IP portfolio opportunities while advancing content and monetization innovations." To bolster brand awareness, content ecosystem, and community, DouYu will invest more in offline and major esports events in the coming months. Ren added, "These initiatives are expected to drive stronger user engagement and create long-term value for our shareholders."
Comments