While it’s undeniable that the COVID-19 pandemic was a boon to valuation in remote communication technologies like Zoom (NASDAQ: ZM) and DocuSign (NASDAQ: DOCU), the reality is that the virus added tailwinds to an already exploding industry. The remote economy further solidified live streaming in the culture of younger generations while familiarizing millions of people with the technology that may have not given it two thoughts a year ago.
Simply, COVID-19 was an accelerant for an industry already on fire thanks to improvements in internet technology (5G), increasing use of mobile devices, being part-in-parcel to younger generation’s lifestyles and more. These were some of the determining factors for Valuates Reports forecasting the global video streaming market rising from $38.56 billion in 2018 to $149.34 billion in 2026.
"We’re living in an ever increasing globalized world, shepherded in by live streaming technology," said KL Wong, Founder and Chairman of Hello Pal (CSE: HP)(OTCQB: HLLPF) , in a phone conversation on the subject with Baystreet.ca. "Where once users would turn to static web page to fill their need, now they are looking for live streaming video, albeit for entertainment, make new acquaintances, learn or any other number or reasons."
Hello Pal is a proprietary suite of mobile applications built on a user-friendly messaging interface that focuses on social interaction, language learning, and travel where users can find and easily interact with people from all over the world through a variety of means, such as chat messaging, audio/video calling and live streaming.
Hello Pal: A Perfect Marriage of Markets
An app for iOS and Android, Hello Pal is, in a manner of speaking, a next-generation confluence of dating app Match (NASDAQ: MTCH), China’s entertainment app Momo, Inc. (NASDAQ: MOMO), social app Facebook (NASDAQ: FB) and Rosetta Stone, the popular tech learning company acquired in August by Cambium Learning Group for $792 million.
A key difference between Facebook and Hello Pal is that Facebook is designed for people that already know each other, whereas Hello Pal is meant for meeting and chatting with new people or groups from anywhere in the world. HP users are able to search by different criteria, including gender, location and language.
By offering different parameters, users can get specific to their needs. For instance, if a person is on or planning a trip to Japan, they can connect with people living there to learn about places to go and things to do.
The language component is a clear differentiator for Hello Pal. The company’s proprietary technology is not simply a translator (although it does translate text messages), it is a teacher. The app is pre-loaded with phrasebooks in 8 languages with more than 2,000 phrases. A user can select a commonly used phrase, listen to a recorded audio of it and subsequently speak and record the message on their own to participate in a chat.
As demonstrated by the popularity of Rosetta Stone, the best way to learn a language is to be immersed in conversation.
Live streaming Value
To build its live stream platform, Hello Pal partnered with the experts at Vortex Live last year. Vortex clearly saw an opportunity, as evidenced by putting up $1.5 million of their own money to build and manage the live stream feature in exchange for a block of Hello Pal stock.
Since launch last summer, the live streaming service of Hello Pal continues to gain in popularity and serve as the main revenue driver for the company. Nowadays, people livestream nearly everything: gaming, cooking, shopping, travel, events, product demos, etc. Hello Pal gives them a platform to earn money in doing so.
By being a "host" of live streams, users can receive gifts called "charms" from other users.
These gifts are purchased using the Hello Pal virtual currency platform, where users make top-up payments via popular payment platforms like Apple’s Appstore, Google’s Playstore, Alipay or Wechat Pay. When a host gets a charm, the charm can then be redeemed for cash.
The Hello Pal platform also includes a proprietary digital wallet allowing users to store and transfer popular digital assets and tokens, including Bitcoin and Ether, based on blockchain technology.
Live streams with bi-directional communication are available 24/7/365 and constantly monitored by Hello Pal staff to ensure there are no violations of standards and terms of use.
Profitability and a 6-Month Streak of $1+ Million in Revenue
Hello Pal now has more than 5.2 million registered users spanning over 200 countries and regions. 15,000+ of those people are daily active users (DAU) of the live streaming service, an increase of over 50% from previous reports from the company regarding DAU, a key growth metric for applications.
Business has really started gaining traction in 2020, with a string of six consecutive months with revenue in excess of $1 million. This includes October, during which monthly revenue exceeded $1.5 million for the second straight month. This is particularly impressive considering just seven months earlier, a record monthly revenue was set in March at approximately $448,000.
There were about 10,000 DAU of the live stream service in March, indicating that revenue per user is also increasing significantly.
Further, generating over $3.0 million during September and October points to accelerating growth considering revenue for the August quarter totaled $3.06 million. At the current clip, Hello Pal’s 12-month revenue run rate exceeds its market cap of roughly $15 million.
Gross profit during the quarter ended August 31, 2020 was $174,411.
"We will continue to refine our user experience, roll out new products and features, and operate in increasingly efficient manner as Hello Pal continues its growth plans," said Mr. Wong in a news release on Wednesday.
While operations today are exclusively in China, the HP Chairman says the growth plans include expansion into new, emerging markets where Hello Pal can have an early mover advantage, including the Middle East, India and Latin America.
Legal Disclaimer/Disclosure: While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our article is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between any predictions and actual results. Always consult a licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment. Furthermore, it is certainly possible for errors or omissions to take place regarding the profiled company, in communications, writing and/or editing. Nothing in this publication should be considered as personalized financial advice. We are not licensed under any securities laws to address your particular financial situation. No communication by our employees to you should be deemed as personalized financial advice. Please consult a licensed financial advisor before making any investment decision. This is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this article is not provided to any individual with a view toward their individual circumstances. Baystreet.ca has been paid a fee of thirty thousand dollars for Hello Pal advertising from the company. There may be 3rd parties who may have shares of Hello Pal and may liquidate their shares which could have a negative effect on the price of the stock. This compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled company. Because of this conflict, individuals are strongly encouraged to not use this article as the basis for any investment decision. By reading this communication, you agree to the terms of this disclaimer, including, but not limited to: releasing Baystreet.ca, its affiliates, assigns and successors from any and all liability, damages, and injury from the information contained in this communication. You further warrant that you are solely responsible for any financial outcome that may come from your investment decisions.