Huya and DouYu, China’s two largest game-centric livestreaming platforms, which Tencent looks to merge, both reported solid revenue growth in the fourth quarter of 2020, as their paying user bases expanded.

For the three months through December, Huya’s total revenue increased 21.2% year-on-year to 3 billion yuan ($458.3 million), about 94% of which came from the livestreaming business, which generated 2.8 billion yuan in revenue, up 20% from a year earlier, according to the company’s latest earnings report on Tuesday.

Huya largely attributed the revenue growth to the increase in its number of paying users, which jumped 17.6% year-on-year to 6 million during the three-month period.

In the fourth quarter, DouYu had a similar revenue structure to Huya, saying its revenue derived from livestreaming accounted for about 91% of its total revenue, which reached 2.3 billion yuan, representing a year-on-year increase of 10%, according to the latest earnings report issued on Tuesday. DouYu’s quarterly livestreaming revenue saw a year-on-year jump of 9.4%, which the company said was primarily due to an increase in its paying users, which increased 4.6% year-on-year to 7.6 million during the period.

However, the two companies differed in terms of profitability. In the fourth quarter, Huya saw its net profit grow 58.6% year-on-year to 253.2 million yuan, while DouYu suffered a net loss of 228.7 million yuan, a U-turn from a net profit of 157.4 million in the same period of 2019.

Tencent’s plan to merge Huya and DouYu may meet with regulatory trouble as Beijing tightens its crackdown on monopolistic behavior by big internet companies. On Tuesday, Reuters reported that Tencent may make concessions in exchange for a nod from the regulators who are concerned that a merger would give Tencent overwhelming dominance in the industry.

Tencent is Huya’s biggest shareholder, with a 36.9% stake, and it owns more than a third of DouYu. Both firms are listed in the U.S.

Contact reporter Ding Yi (yiding@caixin.com)

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