{"text":[[{"start":7.05,"text":"This article only represents the author's own views."}],[{"start":11.05,"text":"It’s not often that you see investors get too excited about share buyback programs, even though they’re meant to be confidence boosters when management thinks a company’s stock is undervalued. But at least in one case, a newly announced $20 million share repurchase plan by online video site Xunlei Ltd. (XNET.US) seems to have brought the desired effect, sparking a 6.6% rally in the company’s shares after the announcement last Friday."}],[{"start":38.5,"text":"https://www.globenewswire.com/news-release/2026/06/26/3318184/15534/en/xunlei-announces-us-20-million-share-repurchase-program.html"}],[{"start":56.6,"text":"Truth be told, the rally looks more like investors searching for a reason to buy the stock rather than any real change in the company’s outlook. Xunlei is a bit of a corporate chameleon lately, starting out as one of China’s earliest online video sites at its founding in 2003 when the Chinese internet was in its infancy."}],[{"start":77.1,"text":"The company was later overtaken by more aggressive and better funded rivals like iQiyi (IQ.US) and Youku, and then thought it found a better business as a cloud services provider. Then it decided several years ago that livestreaming offered even better potential, with a focus on emerging global markets. In March this year, it abruptly jettisoned its cloud business to focus on its other two areas, namely, the foreign-focused Hiya livestreaming business and its original domestically focused subscription business."}],[{"start":106.35,"text":"The brief Friday rally for Xunlei’s stock was part of a broader series of big ups-and-downs for the stock over the last year and a half as investors try to decide what to make of the company. At one point its shares rose by nearly five times from their levels at the end of 2024, only to give back much – but not all – of those gains. At its latest close of $5.36, the stock is still more than double the $2 level where it traded at the end of 2024."}],[{"start":134.5,"text":"After the latest rally last Friday, the stock now trades at a fairly respectable price-to-earnings (P/E) ratio of 18, which is more than double the 8 for Kuaishou (1024.HK), another popular livestreaming site. Other players like iQiyi and Huya (HUYA.US) are actually losing money, which shows how difficult it is to succeed in China’s tough online video market."}],[{"start":159.95,"text":"That may be why investors are showing some favor to Xunlei these days over its domestic peers, as the company is focusing heavily on its livestreaming business that offers services like sports events almost exclusively to people outside China. That business has been growing much faster than the company’s older subscription business that sells mostly to Chinese viewers, which seems like a prudent diversification."}],[{"start":181,"text":"The livestreaming business overtook subscriptions last year to become Xunlei’s biggest revenue source, fueled in part by its acquisition of Hupu, a provider of sports media and data, in June last year. That acquisition helped Xunlei to log 89% year-on-year revenue growth for the livestreaming business in the first quarter of this year, as the figure rose to $53.6 million, according to its latest quarterly report released in late May."}],[{"start":208.5,"text":"The company didn’t say how much of the latest livestreaming revenue figure came from Hupu, which wasn’t contributing anything yet in last year’s first quarter. But previous indications around the time of the acquisition appear to show the service was earning about $10 million in quarterly income at that time, meaning livestreaming revenue without the acquisition would still be up by around 40% in the first quarter."}],[{"start":232.75,"text":"Looming overseas slowdown"}],[{"start":236.1,"text":"By comparison, the company subscription revenue rose by a slower 26% in the first quarter to $45 million. Those two categories combined gave Xunlei $98.6 million in first-quarter revenue, up 54% year-on-year, which presumably excludes contributions in the year-ago period from the company’s cloud services that were sold in March this year."}],[{"start":259.25,"text":"One factor that may have spooked investors this year is company signals that the golden days for international expansion may be limited. That’s not too surprising, since a growing number of Chinese companies are using a similar strategy these days as their home market slows after years of strong growth. Thus, it seems almost inevitable that these companies will start competing with one another overseas as well, especially in the Southeast Asian and Middle Eastern markets that have become two of their favorite places to expand."}],[{"start":290.65,"text":"“We will continue to intensify our overseas expansion, exploring new markets, and optimizing service offerings to sustain momentum,” said Chairman Li Jinbo, on the company’s latest earnings call a month ago. “That said, given the ever-changing competitive landscape, our rapid growth may experience a modest slowdown in future quarters.”"}],[{"start":310.65,"text":"The growing role of the livestreaming business, which carries higher costs than the subscription business, is weighing on Xunlei’s gross margin, which dropped to 58.5% in the first quarter from 61.9% a year earlier. Still, the company managed to sharply boost its non-GAAP income, which excludes certain non-cash items, to $4.1 million in the first quarter from $900,000 a year earlier."}],[{"start":336.4,"text":"One other slight overhang for the company is pending litigation alleging Hupu’s unauthorized use of NBA content in its livestreaming services. CFO Eric Zhou declined to comment on pending litigation in response to a question on the company’s earnings call. He did say the claimed damages were relatively small at about $12.1 million. But perhaps more importantly, Hupu could be forced to give up its streaming of NBA content if it loses the case. And this type of unauthorized usage, which is quite common in China, could also hint that more similar skeletons lie waiting to be discovered in Hupu’s closet, causing future headaches for Xunlei."}],[{"start":375.04999999999995,"text":"One other noteworthy feature for Xunlei is its longtime investment in Arashi Vision, a maker of popular 360-degree action cameras, which listed in Shanghai a year ago. Arashi’s stock soared by about five times right after the listing, but has come down somewhat since then. Still, Xunlei’s stake of 7.8% at the end of last year was worth about 4.1 billion yuan at the current price, which is nearly twice Xunlei’s current market value of about $350 million."}],[{"start":404.24999999999994,"text":"The company had another $304 million in cash at the end of March, meaning its cash plus the Arashi investment alone are worth quite a bit more than its market value. That makes it easier to understand how Xunlei can afford the latest $20 million share repurchase, and hints that perhaps even more repurchases could follow if the stock doesn’t perk up from its current levels."}],[{"start":434.99999999999994,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1782961773_8802.mp3"}