Although both user volume and revenue growth are facing headwinds, Momo still strives for a brighter future
Chinese online business media Jiemian reported in a scoop on Monday that Nasdaq-listed Hello Group (formerly known as Momo, MOMO:Nasdaq) has kicked off its plan to list in Hong Kong recently, and it is likely to go public in six to 12 months should things go smoothly.
Goldman Sachs and CICC will sponsor the listing, the report said. Hello Group declined to comment.
The group, owner of the popular dating app Momo and other Internet services, was listed on the US exchange in December 2014, with Morgan Stanley, JP Morgan Chase & Co, and Credit Suisse as underwriters.
Hello Group spans various businesses, ranging from live video and value added services to mobile games. It has rolled out several mobile applications such as Momo, Tantan and Hertz.
According to data released by the company in September 2021, its monthly active users reached 115.5 million, a year-on-year increase of 1.6%.
According to the company's Q3 2021 financial report, its revenue totaled USD 580 million, down 0.2% year on year, while net income stood at USD 62.6 million, shrinking 11.8% from the same period in 2020.
The two main revenue streams, Momo and Tantan, also a social networking app, accounted for 86.4% and 13.6% of the total revenue respectively.
Additionally, in Q3 2021, Momo's live-streaming and value-added services boasted a combined paying user base of 12.2 million, of which 2.9 million came from Tantan. In comparison, the number was 13.1 million and 4.1 million a year before.
The weakening business fundamentals have been reflected by its stock prices. The company's shares went through a roller-coaster ride ever since its listing on Nasdaq. Priced at USD 13.5 apiece, its shares leapt 26% to close at USD 17.02 on the first trading day.
However, the company's stock sunk to an all-time low of USD 6.04 in February 2016. Although it rallied all the way to USD 48.76 in June 2018, the uptrend did not last. Three months later, the shares plunged nearly 50% from their historical high. Over the last three months, the slide resumed, with shares tumbling 27%.
As of press time, its stock was trading at USD 10.61 apiece.
Despite its lackluster stock performance, Hello Group has the ambitions to restore its valuation to former glory.
Following a series of management reshuffles, the name change now signals Momo's attempt to move beyond the limitations of social networking into broader markets such as movies, which it sees as a new growth spot.
In July 2021, the company launched a new content-sharing app called Shumei, aiming to fulfil teenagers' needs for recommending and sharing lifestyle tips. This move marked an attempt to find the new growth driver for the company.