Following the release of its Q1 2026 results, JOYY Inc. (JOYY) has garnered concentrated bullish sentiment from several major financial institutions. Reports from UBS, Citigroup, CITIC Securities, and Daiwa Securities maintain or reiterate "Buy" ratings, with widespread upward revisions to the company's performance and valuation expectations. Among these, UBS has defined Q1 2026 as an "inflection point" for the social entertainment business, while CITIC Securities has set a price target of $90, the highest among current mainstream institutional targets.

Social Entertainment Hits an "Inflection Point," Institutions Foresee Sustained Growth Trend

JOYY's Q1 financial report shows social entertainment (including live streaming) revenue of $400 million, a year-over-year increase of 3.2%. Core live streaming revenue was $380 million, up 2.4% year-over-year. UBS noted in its report that this business has returned to year-over-year growth, defining it as "an inflection point." UBS analysis attributes this turning point primarily to the company's strategy of optimizing its live streaming ecosystem. Daiwa Securities and CITIC Securities share a similar view, believing that through content ecosystem adjustments and a focus on high-value users, the company has already steered its live streaming business back onto a growth trajectory.

Regarding operational metrics, CITIC Securities cited data from the company's earnings call, indicating that Q1 live streaming revenue in developed markets grew 11.2% year-over-year, the number of core paying live streaming users increased to 1.54 million (up 5.9% year-over-year), and ARPPU reached $214.1. Concurrently, AI is gradually permeating all aspects of the live streaming ecosystem. As of April 2026, AI-generated interactive virtual gifts accounted for 34% of virtual gift consumption on Bigo Live. Institutions generally believe that AI capabilities are continuously enhancing platform content supply, user interaction, and monetization efficiency, providing new driving forces for the long-term growth of the live streaming business.

Optimized Revenue Mix, Rising Contributions from Advertising and SHOPLINE

Beyond the recovery in social entertainment, institutions also believe that BIGO Ads and SHOPLINE are gradually becoming new growth engines for JOYY, driving the company's transformation from a single live streaming platform into a diversified technology company. UBS noted in its report that JOYY is evolving into an AI-powered tech company, with the To B segment (BIGO Ads and SHOPLINE) projected to contribute over 50% of total revenue by 2028; in Q1, this proportion was already close to 30%. CITIC Securities pointed out that the proportion of non-live streaming revenue in Q1 has increased to 31.6%, indicating ongoing optimization of the business structure.

In Q1, BIGO Ads revenue was $125 million, a year-over-year increase of 55.6%, with third-party advertising revenue growing 78.8% year-over-year. CITIC Securities noted that the company's SDK advertising requests increased 109% year-over-year, while Web and IAA advertising budgets grew approximately 90% and 97% year-over-year, respectively, indicating strong growth on both the supply and demand sides of the advertising platform. Management reiterated a revenue target of $1 billion for the third-party advertising business by 2028. Daiwa Securities expressed optimism regarding the advertising business outlook, with its 2026-2028 EPS forecasts being 3% to 11% above market consensus, primarily based on stronger confidence in advertising revenue.

SHOPLINE revenue for Q1 was $30.5 million, a year-over-year increase of 16.1%, with a gross margin of 51.5%. The company expects growth for this business to accelerate to over 25% in Q2. UBS believes that continued expansion of cross-border merchants, entry into new markets like the US, and increased penetration of value-added services such as payments and marketing will provide stronger growth momentum for SHOPLINE in the coming quarters.

Significant Boost to Shareholder Returns, High Cash Reserves Reinforce Value Proposition

Another core factor highlighted by institutions is the adjustment to the shareholder return plan. The company has increased its total shareholder return plan for 2026-2028 from $900 million to $1.5 billion, comprising $900 million in dividends and up to $600 million in share buybacks. CITIC calculates that this represents a total three-year return rate of 46.5%, or a simple annualized return of 15.5%, including an annualized dividend yield of 9.3% and an annualized buyback yield of 6.2%. In Q1, $75.6 million in dividends was already distributed, and cumulative share buybacks exceeded $87 million. Citigroup anticipates potential for further increases in the buyback quota within the year.

As of the end of Q1, JOYY's net cash position stood at $3.175 billion, essentially equivalent to the company's total market capitalization. Institutions believe this "high cash plus high dividend" profile provides a solid safety net for the stock price.

On valuation, CITIC Securities, referencing peer valuations, applied a 16x 2026 Non-GAAP P/E multiple to arrive at its high-end price target of $90. UBS used a Sum-of-the-Parts (SOTP) valuation method to derive a target price of $83, while Citigroup's similar calculation yielded $78. Daiwa Securities switched to a 13x P/E valuation, resulting in an $85 target.

The company's guidance for Q2 revenue is $562-$581 million, representing year-over-year growth of 10.7%-14.4%, which is above market consensus. Full-year Non-GAAP operating profit and EBITDA are expected to grow 10%-20% year-over-year. Supported by the triple logic of a stabilizing core business, scaling new businesses, and substantial shareholder returns, institutions generally remain optimistic about the company's subsequent performance and potential for valuation recovery.