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DOUYU INTERNATIONAL HOLDINGS LIMITED INDEX TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS



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As filed with the United States Securities and Exchange Commission on April 22, 2019.

Registration No. 333-





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933





DouYu International Holdings Limited

(Exact name of Registrant as specified in Its charter)





Not Applicable

(Translation of Registrant's name into English)





Cayman Islands

(State or other jurisdiction of

incorporation or organization) 7370

(Primary Standard Industrial

Classification Code Number) Not Applicable

(I.R.S. Employer

Identification Number)

Building F4, Optical Valley Software Park

Guanshan Avenue,

Donghu Development Area, Wuhan, 430073

The People's Republic of China

+86 27 8775 0710

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)





Cogency Global Inc.

10 E. 40th Street, 10th Floor, New York,

NY 10016

(800) 221-0102

(Name, address, including zip code, and telephone number, including area code, of agent for service)





Copies to:

Li He, Esq.

Davis Polk & Wardwell LLP

2201 China World Office 2

No. 1 Jian Guo Men Wai Avenue

Chaoyang District, Beijing, 100004

People's Republic of China

+86 10-8567-5000



James C. Lin, Esq.

Davis Polk & Wardwell LLP

c/o 18th Floor, The Hong Kong Club Building

3A Chater Road

Central, Hong Kong

+852 2533-3300



Allen C. Wang, Esq.

Latham & Watkins LLP

18th Floor, One Exchange Square

8 Connaught Place, Central

Hong Kong

+852 2912-2692





Approximate date of commencement of proposed sale to the public:

As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company ý

If an emerging growth company that prepares its financial statements in accordance with US GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. o





CALCULATION OF REGISTRATION FEE

Title of each class of securities

to be registered

Proposed maximum

aggregate offering

price(1)

Amount of

registration fee

Ordinary shares, par value US$0.0001 per share(2)(3) US$500,000,000 US$60,600

(1) Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(o) under the Securities Act of 1933.



(2) Includes ordinary shares initially offered and sold outside the United States that may be resold from time to time in the United States either as part of their distribution or within 40 days after the later of the effective date of this registration statement and the date the shares are first bona fide offered to the public, and also includes ordinary shares that may be purchased by the underwriters pursuant to an over-allotment option. These ordinary shares are not being registered for the purpose of sales outside the United States.



(3) American depositary shares issuable upon deposit of the ordinary shares registered hereby will be registered under a separate registration statement on Form F-6 (Registration No.333- ). Each American depositary share represents ordinary shares.





The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine.

 The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to completion

Preliminary Prospectus dated , 2019

American Depositary Shares

DouYu International Holdings Limited

Representing Ordinary Shares





This is an initial public offering of American depositary shares, or ADSs, representing ordinary shares of DouYu International Holdings Limited.

We are offering ADSs. [The selling shareholders identified in this prospectus are offering an additional ADSs. We will not receive any of the proceeds from the sale of the ADSs being sold by the selling shareholders.] Each ADS represents of our ordinary shares, par value US$0.0001 per share.

Prior to this offering, there has been no public market for the ADSs. It is currently estimated that the initial public offering price per share will be between US$ and US$ .

We will apply for listing the ADSs on the New York Stock Exchange under the symbol "DOYU."

We are an "emerging growth company" under applicable U.S. federal securities laws and are eligible for reduced public company reporting requirements.





See "Risk Factors" beginning on page 16 for factors you should consider before buying the ADSs.





Neither the United States Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.



Per ADS

Total

Public offering price US$ US$ Underwriting discounts and commissions(1) US$ US$ Proceeds, before expenses, to us US$ US$ [Proceeds, before expenses, to the selling shareholders US$ US$]

(1) For a description of the compensation payable to the underwriters, see "Underwriting."

The underwriters have an option to purchase up to an additional ADSs from us [and certain selling shareholders] at the initial public offering price less the underwriting discount, within 30 days from the date of this prospectus.

The underwriters expect to deliver the ADSs against payment in U.S. dollars in New York, New York on , 2019.





Morgan Stanley J.P. Morgan BofA Merrill Lynch





The date of this prospectus is , 2019.

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We have not authorized anyone to provide any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we may have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters have not authorized any other person to provide you with different or additional information. Neither we nor the underwriters are making an offer to sell the ADSs in any jurisdiction where the offer or sale is not permitted. This offering is being made in the United States and elsewhere solely on the basis of the information contained in this prospectus. You should assume that the information appearing in this prospectus is true, complete and accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of the ADSs. Our business, financial condition, results of operations and prospects may have changed since the date of this prospectus.

We have not taken any action to permit a public offering of the ADSs outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to the offering of the ADSs and the distribution of the prospectus outside the United States.

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Until , 2019 (the 25th day after the date of this prospectus), all dealers that buy, sell or trade ADSs, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements and the related notes appearing elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in our ADSs discussed under "Risk Factors" and information contained in "Management's Discussion and Analysis of Financial Condition and Results of Operations" before deciding whether to buy our ADSs. This prospectus contains information derived from various public sources and certain information from an industry report dated January 16, 2019, as supplemented, that was commissioned by us and prepared by iResearch Consulting Group, or iResearch, a third-party industry research firm, to provide information regarding our industry and market position in China. We refer to this report as the iResearch Report. Such information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. Information that is based on estimates, forecasts, projections or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the "Risk Factors" section. These and other factors could cause results to differ materially from those expressed in these publications and reports. Our Mission We make the world a fun place through games and other interactive entertainment. Overview We are the largest game-centric live streaming platform in China and a pioneer in the eSports value chain. We operate our platform both on PC and mobile apps, through which users can enjoy immersive and interactive games and entertainment live streaming. According to iResearch, among China's game-centric live streaming platforms, we ranked:  first by the size of our user base as measured by average total MAUs on both mobile and PC platforms during the fourth quarter of 2017 and 2018;



 first by the level of user engagement as measured by average total daily time spent by active users on our platform during the fourth quarter of 2017 and 2018; and



 first by the number of top 100 game streamers with whom we contracted in December 2017 and December 2018. The passion for games and interactions among gamers and game enthusiasts extend beyond just playing. Against the backdrop of eSports' booming popularity, China has a massive and growing gamer community that is seeking interactive and engaging entertainment through game live streaming. According to iResearch, China is the world's largest game-centric live streaming market, with approximately 4.9 times the MAUs of the U.S. market in 2018. Revenues from China's game-centric live streaming market is expected to grow at a CAGR of 24.7% from 2018 to 2023, which is nearly twice the expected growth rate of the non-game-centric live streaming market. Game-centric live streaming revenue accounted for 13.8%, 24.1% and 28.0% of total live streaming revenue in 2016, 2017 and 2018 in China. In 2018, live streaming annual ARPPU in China was RMB574, which takes into account both the game-centric and non-game centric live streaming platforms, while game-centric live streaming annual ARPPU in China was RMB365. The difference between live streaming annual ARPPU and game-centric live streaming annual ARPPU indicates significant growth potential for game-centric live streaming ARPPU. The average total MAUs of game-centric live streaming platforms in China are expected to increase from 255 million in 2018 to 400 million by 2023. As the leading

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game-centric live streaming platform in China, we are well positioned to capture a significant share of this large and growing user base. Our platform attracts a large number of highly loyal and engaged users. As of December 31, 2016, 2017 and 2018, we had 98.7 million, 182.1 million and 253.6 million registered users, respectively. With 111.4 million average MAUs on our PC platform and 42.1 million average MAUs on our mobile platform, we had 153.5 million average total MAUs during the fourth quarter of 2018, representing year-over-year growth of 14.3% from 134.3 million average total MAUs during the same period of 2017. We consider our PC platform an important component of our business as it attracts PC users who are more devoted eSports enthusiasts and is a natural gateway to eSports games, which enables users to simultaneously play games and watch game live streaming. According to iResearch, we were the most searched game-centric live streaming platform in China based on average of Baidu's search index and ranked as the top free and top grossing game-centric live streaming app in Apple's App Store in 2018. Our large user base is primarily acquired through organic growth, with over 92% of our new mobile users in the fourth quarter of 2018 installed our apps without third-party marketing. Our diverse product offerings and continuously enriched content allow us to effectively retain users, evidenced by our 75.2% and 74.9% average next-month active user retention rates over the past twelve months as of December 2017 and December 2018, respectively. Our average next-three-month registered user retention rate was 68.9% and 68.6% for the same periods. Our large and loyal user base is also highly engaged, as evidenced by the average total daily time spent by active users of 17.2 million and 24.2 million hours in the fourth quarter of 2017 and 2018, respectively. The average daily time spent by each active user was 40 minutes and 54 minutes for the same periods. Our active users spent over 1.6 billion and 2.2 billion hours on our platforms and generated more than 2.0 billion and 2.1 billion bullet chats in the fourth quarter of 2017 and 2018, respectively. Our platform brings together a deep pool of top streamers and provides a sustainable streamer development system. As of December 31, 2017 and 2018, our platform had 3.9 million and 6.0 million registered streamers, including more than 2,000 and 5,200 top streamers each of whom entered into an exclusive contract with us directly as of each date, respectively. These top exclusive streamers streamed an average of 3.8 and 4.2 hours per show in the fourth quarter of 2017 and 2018, respectively, and all of our streamers generated a total of 16.6 million and 29.8 million streaming hours during the same periods. Approximately 430 and 592 of our streamers had more than one million viewers during the fourth quarter of 2017 and 2018, respectively. Approximately 384,800 of our streamers are managed through talent agencies as of December 31, 2018. Our exclusive contract model with top streamers helps ensure a consistent supply of quality content, which is effectively supplemented by the talent agency model that captures a large group of promising and rising streamers. With years of experience, we have developed a well-designed system to discover, train, and promote streamers who are already popular or have demonstrated the potential to become popular, and to help them grow and monetize their popularity. As one of the first game-centric live streaming platforms to make the foray into eSports, we are strategically positioned to benefit from the proliferation of the eSports industry in China. The eSports industry generates highly attractive content and helps to transform our platform into an engaged and vibrant community. Through our investments in and collaborations with a variety of participants across the value chain, we have gained coveted access to premium eSports content attracting millions of viewers to our platform and enabling us to organize our own tournaments and produce exclusive eSports content only available on our platform which further attracts viewers and improves their stickiness. According to iResearch, we had the largest eSports viewer base as measured by average total MAUs that viewed eSports live streaming during the fourth quarter of 2017 and 2018. Our average total eSports MAUs were approximately 80.9 million and 95.8 million in the fourth quarter of 2017 and 2018, respectively.

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We have built powerful technology infrastructure to ensure a stable and optimized live streaming experience for our users. The optimized user experience attracts a large number of users on our platform and enables us to collect and analyze vast amounts of behavioral data leveraging our big data analytics capabilities. Investing in the user experience generates significant benefits for our platform. For example, since the implementation of our customized content recommendation system in early 2016, our user click-through rate for content recommendations on our home page increased from 18% in June 2016 to 43% in December 2018. Through comprehensive and refined content categorization, customized recommendations and development of new products and features, we enhance user experience to attract new users and increase user loyalty. We employ a multi-channel monetization model. We believe the vibrant and interactive game community created on our platform drives user satisfaction, which provides diversified opportunities for user spending. Leveraging a large number of viewers and a deep pool of streamers, our monetization channels mainly consists of live streaming, advertisement and others. These channels effectively supplement each other and unleash future monetization potential. Live streaming is our main monetization channel and generated 77.7%, 80.7% and 86.1% of our total net revenue in 2016, 2017 and 2018, respectively. Our live streaming revenue is primarily derived from the sales of a wide array of virtual gifts. Our massive and highly engaged user base attracts advertisers from a wide spectrum of industries and allows us to distribute games for game developers and publishers, which has led to rapid growth in our advertising and game distribution revenue since 2016. We have grown rapidly since our inception. Our revenue increased from RMB786.9 million in 2016 to RMB1,885.7 million in 2017, and reached RMB3,654.4 million (US$531.5 million) in 2018. We had net loss of RMB782.9 million, RMB612.9 million and RMB876.3 million (US$127.4 million) during those same periods.

Our Strengths

We are at the forefront of the game-centric live streaming industry in China. We believe that the following competitive strengths contribute to our success and differentiate us from our competitors.  Leading game-centric live streaming platform



 Large and highly engaged user base



 Deep pool of top streamers empowered by a comprehensive streamer development system



 Strategically positioned in eSports to secure coveted access to premium content



 Technology- and big data-enabled user experience and value proposition



 Multiple monetization channels with significant potential



 Visionary and experienced management team with strong shareholder support

Our Strategies

To fulfill our mission of making the world a fun place through games and other interactive entertainment, we plan to pursue the following strategies to grow our business.  Further strengthen our position in the eSports industry



 Continue to attract more viewers and streamers while investing in technologies



 Increase monetization capabilities



 Selective overseas expansion

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Our Challenges

We face risks and uncertainties in realizing our business objectives and executing our strategies, including those relating to:  our ability to retain our existing users, keep them engaged or further grow our user base;



 our ability to attract, cultivate and retain top streamers;



 our ability to offer attractive content, in particular popular game content;



 our ability to maintain our market position in the eSports industry;



 Our ability to realize the benefits we expect from our strategic cooperation with Tencent;



 Our ability to align interests with certain existing shareholders who have substantial influence over our company;



 our ability to manage our growth and control our periodic spending to maintain such growth;



 our ability to reach profitability depending on our ability to grow in a cost-effective way;



 our ability to implement our growth or monetization strategies;



 our ability to prevent misconduct by our platform users and misuse of our platform;



 our ability to evaluate our business and growth prospects in a relatively new market;



 our ability to compete with other established streaming platforms and other entertainment mediums;



 our ability to continue to grow or maintain our paying ratio; and



 our ability to obtain and maintain the licenses and approvals required under the complex regulatory environment for Internet-based businesses in China. Recent Developments We continue to broaden our user base leveraging our rich and dynamic content offerings, especially eSports content, a deep pool of top streamers and engaging social features. Our average total MAUs were approximately 159.2 million in the first quarter of 2019, representing an increase of 25.7% from 126.7 million average total MAUs in the first quarter of 2018. The average MAUs on our PC platform increased by 21.0% from 91.0 million in the first quarter of 2018 to 110.1 million in the first quarter of 2019, while the average MAUs on our mobile platform increased by 37.5% from 35.7 million in the first quarter of 2018 to 49.1 million in the first quarter of 2019. Our large user base is also highly engaged, and spent around 2.3 billion hours on our platforms in the first quarter of 2019, as compared to approximately 1.6 billion hours in the first quarter of 2018, which implies an average total daily time spent by active users of 26.0 million hours in the first quarter of 2019, an increase of 50.3% from 17.3 million hours in the first quarter of 2018. As we continued our efforts in cultivating users' paying habits, our number of paying users grew by 66.7% from 3.6 million in the first quarter of 2018 to 6.0 million in the first quarter of 2019. Our results for the three months ended March 31, 2019 may not be indicative of our results for the full year ending December 31, 2019 or for future periods. Please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" included elsewhere in this prospectus for information regarding trends and other factors that may affect our results of operations.

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Corporate History and Structure

Corporate History Establishments of Our PRC Subsidiaries and Consolidated Entities We commenced operations and launched our live streaming platform in 2014 with the establishment of Guangzhou Douyu. Wuhan Douyu was established in May 2015. In February 2016, Guangzhou Douyu and Wuhan Douyu entered into an asset and business transfer agreement, pursuant to which Guangzhou Douyu transferred all of its business operations and assets to Wuhan Douyu (the "2016 Wuhan Douyu Restructuring"). In February 2016, Wuhan Douyu, Wuhan Ouyue, the successor of Zhejiang Ouyue which was acquired by Mr. Shaojie Chen in November 2015, and Mr. Chen entered into a series of contractual arrangements, by which Wuhan Douyu may exert control over Wuhan Ouyue and consolidate Wuhan Ouyue's financial statements. In May 2018, such contractual arrangements were terminated and replaced by contractual arrangements between Douyu Yule, Wuhan Ouyue and Mr. Chen. For details please refer to "Corporate Restructuring Transactions." In June 2016, each of Yuxing Tianxia, Yuyin Raoliang and Wuhan Yuwan was incorporated in the PRC by Wuhan Douyu. In November 2016, each of Douyu Education and Yu Leyou was incorporated in the PRC by Wuhan Douyu. These entities focus on entering into business contracts with streamers. Corporate Restructuring Transactions We underwent a series of restructuring transactions in contemplation of this offering ("Restructuring Transactions"), which primarily included:  In January 2018, DouYu International Holdings Limited was incorporated under the laws of the Cayman Islands as our proposed listing entity. In connection with its incorporation, it issued ordinary and preferred shares to certain of the then existing shareholders of Wuhan Douyu based on their equity interests held in Wuhan Douyu. For details of the issuances of shares by DouYu International Holdings Limited to its shareholders prior to this offering, please refer to "Description of Share CapitalHistory of Securities Issuances."



 In January 2018, DouYu Network Inc. was established in the British Virgin Islands and Douyu Hongkong Limited was incorporated in Hong Kong, both of which are acting as the offshore intermediary holding companies to facilitate our initial public offering in the United States.



 In May 2018, Douyu Yule, our indirect wholly-owned PRC subsidiary, entered into a series of contractual arrangements with each of Wuhan Douyu and Wuhan Ouyue, as well as their respective shareholders. As a result of these contractual arrangements, we obtained effective control, and became the primary beneficiary of, each of Wuhan Douyu and Wuhan Ouyue, or our VIEs. We are a holding company and does not directly own any substantive business operations in the PRC. We currently focus our business operations within the PRC through Douyu Yule and our VIEs, Wuhan Douyu and Wuhan Ouyue. See "Risk FactorsRisks Related to Our Corporate Structure." Wuhan Douyu, Wuhan Ouyue and their respective subsidiaries hold our ICP License, the License for Online Transmission of Audio/Video Programs and the Internet Culture Operation License and other licenses and permits that are necessary for our business operations in the PRC.

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Corporate Structure The following diagram illustrates our corporate structure, including our significant subsidiaries and variable interest entities, immediately upon the completion of this offering, assuming no exercise of the over-allotment option granted to the underwriters. Notes: (1) The sole shareholder of Wuhan Ouyue is Mr. Shaojie Chen, our founder, CEO and director.



(2) The shareholders of Wuhan Douyu and their relationship with our company are as follows: (i) Mr. Chen (35.15%), our founder, CEO and director; (ii) Linzhi Lichuang (18.98%), an affiliate of Nectarine, one of our shareholders; (iii) Mr. Dongqing Cai (13.18%), the beneficial owner of Aodong Investments Limited, one of our shareholders; (iv) Beijing Fengye (13.16%), 99.99% of its interests is owned by Wuhan Ouyue; (v) Beijing Phoenix (8.08%), an affiliate of Phoenix Fuju Limited, one of our shareholders; (vi) Mr. Wenming Zhang (3.92%), our co-founder, co-CEO and director, and (vii) certain other third-party investors.

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IMPLICATIONS OF BEING AN EMERGING GROWTH COMPANY

As a company with less than US$1.07 billion in revenue for the last fiscal year, we qualify as an "emerging growth company" pursuant to the Jumpstart Our Business Startups Act of 2012 (as amended by the Fixing America's Surface Transportation Act of 2015), or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, in the assessment of the emerging growth company's internal control over financial reporting. The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. Pursuant to the JOBS Act, we have elected to take advantage of the benefits of this extended transition period for complying with new or revised accounting standards as required when they are adopted for public companies. As a result, our operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards. We will remain an emerging growth company until the earliest of (i) the last day of our fiscal year during which we have total annual gross revenues of at least US$1.07 billion; (ii) the last day of our fiscal year following the fifth anniversary of the completion of this offering; (iii) the date on which we have, during the previous three-year period, issued more than US$1.0 billion in non-convertible debt; or (iv) the date on which we are deemed to be a "large accelerated filer" under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our ADSs that are held by non-affiliates exceeds US$700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above. For details, please refer to "Risk FactorsWe are an emerging growth company and may take advantage of certain reduced reporting requirements."

OUR CORPORATE INFORMATION

Our principal executive offices are located Building F4, Optical Valley Software Park, Guanshan Avenue, Donghu Development Area, Wuhan, the People's Republic of China. Our telephone number at this address is +86 27 8775 0710. Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited at PO Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands. Our agent for service of process in the United States is Cogency Global Inc. located at 10 E. 40th Street, 10th Floor, New York, NY 10016. Our corporate website is www.douyu.com . The information contained in our website is not a part of this prospectus.

CONVENTIONS WHICH APPLY TO THIS PROSPECTUS

Unless we indicate otherwise, all information in this prospectus reflects the following:  no exercise by the underwriters of their over-allotment option to purchase up to additional ADSs representing ordinary shares from us; and Except where the context otherwise requires and for purposes of this prospectus only:  "active users" refers to users who visited our platform through PC or mobile app at least once in a given period; the number of active PC users is measured as the number of independent cookies generated by our website when users visited our platform through PC in a given period, and the number of active mobile users is measured as the number of mobile devices that launched our mobile apps in a given period. The number of active users is calculated by treating each distinguishable independent cookie or mobile device as a separate user even though some

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individuals may access our platform with more than one independent cookie or using more than one mobile device and multiple individuals may access our services with the same independent cookie or using the same mobile device;  "ADSs" refers to the American depositary shares, each representing of our ordinary shares;



 "ARPPU" refers to average live streaming revenue per paying user in a given period;



 "average daily time spent by each active user" for any period is calculated by dividing (i) the sum of daily time spent by each active user for each day of such period, by (ii) the number of days for such period;



 "average next-month active user retention rate" for any period is calculated by dividing (i) the sum of next-month active user retention rate for each month of such period, by (ii) the total number of months in such period;



 "average next-three-month active user retention rate" for any period is calculated by dividing (i) the sum of next-three-month active user retention rate for each month of such period, by (ii) the total number of months in such period;



 "average total daily time spent by active users" for any period is calculated by dividing (i) the sum of time spent on our platform by active users on each day for such period, by (ii) the number of days for such period;



 "average total eSports MAU" refers to the average total eSports MAUs during a given period of time calculated by dividing (i) the sum of active users, including active PC users and active mobile users who accessed game-themed channels on our platform in each month of such period, by (ii) the number of months in such period;



 "average total MAUs" refers to the average total MAUs during a given period of time calculated by dividing (i) the sum of active users, including active PC users and active mobile users for each month of such period, by (ii) the number of months in such period;



 "Beijing Fengye" refers to Beijing Fengye Equity Investment Center (Limited Partnership);



 "Beijing Phoenix" refers to Beijing Phoenix Rich Investment Management Center (Limited Partnership);



 "Beijing Sequoia" refers to Beijing Sequoia Xinyuan Equity Investment Center (Limited Partnership);



 "CDN" refers to content delivery network;



 "China" or "PRC" refer to the People's Republic of China, excluding, for the purpose of this prospectus only, Taiwan, Hong Kong and Macau;



 "daily time spent by each active user" on a particular date is calculated by dividing (i) the sum of time spent on our platforms by active users on such date, by (ii) the sum of the number of active users on such date;



 "Douyu Education" refers to Wuhan Douyu Education Consulting Co., Ltd.;



 "Douyu Yule" refers to Wuhan Douyu Culture Network Technology Co., Ltd.;



 "Gogo Glocal" refers to Gogo Glocal Holding Limited, a company incorporated under the laws of the Cayman Islands;



 "Guangzhou Douyu" refers to Guangzhou Douyu Internet Technology Co., Ltd.;

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 "Linzhi Lichuang" refers to Linzhi Lichuang Information Technology Co., Ltd., an entity controlled by Tencent Holdings Limited;



 "live streaming annual ARPPU" is calculated by dividing the annual virtual gifting revenue for both the game-centric and non-game centric live streaming platforms by the number of annual paying users for live streaming platforms with duplicates removed across all platforms;



 "MAUs" refers to the number of active users, including active PC users and active mobile users in a given month;



 "Nectarine" refers to Nectarine Investment Limited, a wholly-owned subsidiary of Tencent Holdings Limited;



 "next-month active user retention rate" is calculated by dividing (i) the sum of active users who visited our platform through PC or mobile app at least once in the next month after a given month, by (ii) the sum of all active users in that given month. Next-month active user retention rate is only available from September 2016;



 "next-three-month active user retention rate" is calculated by dividing (i) the sum of active users who visited our platform through PC or mobile app at least once in the month that is three months after a given month, by (ii) the sum of all active users in that given month. Next-three-month active user retention rate is only available from September 2016;



 "ordinary shares" prior to the completion of this offering refers to our ordinary shares of par value US$0.0001 per share;



 "P2P" refers to peer-to-peer;



 "paying user" refers to a registered user that has purchased virtual gifts on our platform at least once during the relevant period. A paying user is not necessarily a unique user, however, as a unique user may set up multiple paying user accounts on our platform, and consequently, the number of paying users we present in this prospectus may not equal to the number of unique individuals who made purchases on our platform for any given period of time;



 "paying ratio" for a given quarter is calculated by dividing (i) the sum of paying users in such quarter, by (ii) the average total MAUs in such quarter;



 "quarterly average ARPPU" refers to average live streaming revenue per paying user for each quarter during a given period of time calculated by dividing live streaming revenue for a given period by: (i) quarterly average paying users for that given period and (ii) number of quarters in that given period;



 "quarterly average paying users" refers to the average paying users for each quarter during a given period of time calculated by dividing (i) the sum of paying users for each quarter of such period, by (ii) the number of quarters in such period;



 "registered streamer" refers to a user that has been registered on our platform as a streamer;



 "registered user" refers to a user that has registered and logged onto our platform at least once since registration. We calculate registered user as the cumulative number of user accounts at the end of the relevant period that have logged onto our platform at least once after registration. Each individual user may have more than one registered user account, and consequently, the number of registered users we present in this prospectus may not equal to the number of unique individuals who are our registered users;



 "retention rate" refers to the percentage of users who make at least one repeat use after a certain duration;

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 "RMB" or "Renminbi" refers to the legal currency of the People's Republic of China;



 "RSU" refers to restricted share unit;



 "Tencent" refers to Tencent Holdings Limited;



 "top 100 game streamers" were the top 100 game streamers ranked by iResearch according to a final weighted score consisting of a combination of game streamers' nominal value of virtual gifts received and the number of bullet chats in their respective live streaming room in a given period; "game streamers" were the streamers who choose to categorize their streaming content as game content on game-centric live streaming platforms;



 "US$," "dollars" or "U.S. dollars" refers to the legal currency of the United States;



 "We," "Us," "Our company," and "Our," refer to DouYu International Holdings Limited, a Cayman Islands company, its subsidiaries, variable interest entities and subsidiaries of its variable interest entities;



 "Wuhan Douyu" refers to Wuhan Douyu Internet Technology Co., Ltd.;



 "Wuhan Ouyue" refers to Wuhan Ouyue Online TV Co., Ltd.;



 "Wuhan Yuwan" refers to Wuhan Yuwan Culture Media Co., Ltd.;



 "Yu Leyou" refers to Wuhan Yu Leyou Internet Technology Co., Ltd.;



 "Yuxing Tianxia" refers to Wuhan Yuxing Tianxia Culture Media Co., Ltd.;



 "Yuyin Raoliang" refers to Wuhan Yuyin Raoliang Culture Media Co., Ltd.; and



 "Zhejiang Ouyue" refers to Zhejiang Ouyue Online TV Co., Ltd., which was subsequently renamed Wuhan Ouyue. Unless the context otherwise requires, the operating data presented for our company in this prospectus excludes Gogo Glocal, a company incorporated under the laws of the Cayman Islands. We acquired a controlling stake of Gogo Glocal in October 2018. We have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown as totals or percentages may not be an arithmetic calculation of the figures that preceded them. This prospectus contains information and statistics relating to China's economy and its games and eSports market and game-centric live streaming industry derived from various publications issued by market research companies and PRC governmental entities, which have not been independently verified by us, the underwriters or any of their respective affiliates or advisers. The information in such sources may not be consistent with other information compiled in or outside China. Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi in this prospectus are made at RMB6.8755 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on December 28, 2018. We make no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, the rates stated below, or at all. On April 12, 2019, the noon buying rate for Renminbi was RMB6.7039 to US$1.00.

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THE OFFERING

Offering price US$ per ADS. ADSs offered by us ADSs (or ADSs if the underwriters exercise their over-allotment option in full). [ADSs offered by the selling shareholders ADSs (or ADSs if the underwriters exercise their over-allotment option in full).] The ADSs Each ADS represents ordinary shares, par value US$0.0001 per share. The depositary will hold the ordinary shares underlying your ADSs. You will have rights as provided in the deposit agreement. We do not expect to pay dividends in the foreseeable future. If, however, we declare dividends on our ordinary shares, the depositary will pay you the cash dividends and other distributions it receives on our ordinary shares, after deducting its fees and expenses in accordance with the terms set forth in the deposit agreement. You may turn in your ADSs to the depositary in exchange for ordinary shares. The depositary will charge you fees for any exchange. We may amend or terminate the deposit agreement without your consent. If you continue to hold your ADSs after an amendment to the deposit agreement, you agree to be bound by the deposit agreement as amended. To better understand the terms of the ADSs, you should carefully read the "Description of American Depositary Shares" section of this prospectus. You should also read the deposit agreement, which is filed as an exhibit to the registration statement that includes this prospectus. Ordinary shares We will issue ordinary shares represented by ADSs in this offering. All options, regardless of grant dates, will entitle holders to the equivalent number of ordinary shares once the vesting and exercising conditions on such share-based compensation awards are met. See "Description of Share Capital." Ordinary shares outstanding immediately after this offering

Immediately upon the completion of this offering, ordinary shares will be outstanding, comprising ordinary shares, par value US$0.0001 per share (or ordinary shares if the underwriters exercise their option to purchase additional ADSs in full), including ordinary shares, which number of shares has been calculated based on the initial offering price of US$ per ADS.

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Over-allotment option We [and certain selling shareholders] have granted to the underwriters an option, which is exercisable within 30 days from the date of this prospectus, to purchase up to an aggregate of additional ADSs. Use of proceeds We expect to receive net proceeds of approximately US$ million from this offering, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. [We will not receive any of the proceeds from the sale of ADSs by the selling shareholders.] We plan to use the net proceeds of this offering primarily (i) to provide premium eSports content and further expand content genres, (ii) to continue to strengthen technologies and big data analytic capabilities, (iii) to invest in marketing activities, and (iv) for general corporate purposes. See "Use of Proceeds." Lockup We, our directors and executive officers, our existing shareholders and RSU holders have agreed with the underwriters, subject to certain exceptions, not to sell, transfer or dispose of, directly or indirectly, any of ADSs or ordinary shares or securities convertible into or exercisable or exchangeable for ADSs or ordinary shares for a period of 180 days after the date of this prospectus. See "Shares Eligible for Future Sale" and "Underwriting" for more information. NYSE trading symbol DOYU Payment and settlement The underwriters expect to deliver the ADSs against payment therefor through the facilities of The Depository Trust Company on , 2019. Depositary JPMorgan Chase Bank, N.A. Risk factors See "Risk Factors" and other information included in this prospectus for discussions of the risks relating to investing in the ADSs. You should carefully consider these risks before deciding to invest in the ADSs.

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SUMMARY COMBINED AND CONSOLIDATED FINANCIAL DATA AND OPERATING DATA

The following summary combined and consolidated statements of comprehensive income/(loss) data for the years ended December 31, 2016, 2017 and 2018, summary combined and consolidated balance sheet data as of December 31, 2016, 2017 and 2018 and summary combined and consolidated cash flow data for the years ended December 31, 2016, 2017 and 2018 have been derived from our audited combined and consolidated financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of results expected for future periods. You should read this Summary Combined and Consolidated Financial Data and Operating Data section together with our combined and consolidated financial statements and the related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.

For the Year Ended

December 31,

2016 2017 2018

RMB RMB RMB US$

(in millions)

Net revenues 786.9 1,885.7 3,654.4 531.5 Cost of revenues (1,155.1 ) (1,890.4 ) (3,503.4 ) (509.5 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross (loss)/profit (368.2 ) (4.7 ) 151.0 22.0 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: Sales and marketing expenses (223.5 ) (310.3 ) (538.9 ) (78.4 ) Research and development expenses (93.5 ) (212.1 ) (329.3 ) (47.9 ) General and administrative expenses(1) (95.0 ) (100.6 ) (196.8 ) (28.6 ) Other operating income, net 3.8 9.3 54.9 7.9 Total operating expenses (408.2 ) (613.7 ) (1,010.1 ) (147.0 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from operations (776.4 ) (618.4 ) (859.1 ) (125.0 ) Other income (expense), net 0.0 (0.3 ) (20.2 ) (2.9 ) Foreign exchange loss, net   (75.6 ) (11.0 ) Interest income 3.9 6.9 85.8 12.5 Interest expenses (8.9 )    Fair value change of warranty liabilities 0.7    ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss before income taxes (780.7 ) (611.8 ) (869.1 ) (126.4 ) Income tax expenses     Share of loss in equity method investments, net (2.2 ) (1.1 ) (7.2 ) (1.0 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss (782.9 ) (612.9 ) (876.3 ) (127.4 ) Deemed dividend (284.9 )  (6.7 ) (1.0 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss attributable to ordinary shareholders of the Company (1,067.8 ) (612.9 ) (883.0 ) (128.4 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss (782.9 ) (612.9 ) (876.3 ) (127.4 ) Other comprehensive loss, net of tax of nil: Foreign currency translation adjustments   325.6 47.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive loss (782.9 ) (612.9 ) (550.7 ) (80.1 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Note: (1) Includes share-based compensation of RMB24.9 million, RMB17.6 million and RMB35.4 million (US$5.1 million) in 2016, 2017 and 2018, respectively.

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Combined and Consolidated Balance Sheet Data The following table presents our summary combined and consolidated balance sheet data as of December 31, 2016, 2017 and 2018.

As of December 31,

2016 2017 2018

RMB RMB RMB US$

(in millions)

Summary Combined and Consolidated Balance Sheet Data: Cash and cash equivalents 516.8 539.6 5,562.2 809.0 Total current assets 675.9 862.9 6,117.0 889.7 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets 778.9 1,031.6 6,494.9 944.6 Deferred revenue 15.0 45.9 112.1 16.3 Accrued expenses and other current liabilities 120.7 208.2 313.5 45.6 Total current liabilities 523.9 871.9 2,863.9 416.5 Total liabilities 523.9 871.9 2,863.9 416.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities, convertible redeemable preferred shares and shareholders' deficit 778.9 1,031.6 6,494.9 944.6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table presents our summary combined and consolidated cash flow data for the years ended December 31, 2016, 2017 and 2018.

For the Year Ended

December 31,

2016 2017 2018

RMB RMB RMB US$ Net cash used in operating activities (714.1 ) (381.0 ) (337.6 ) (49.1 ) Net cash used in investing activities (86.3 ) (92.0 ) (265.0 ) (38.5 ) Net cash provided by financing activities 1,298.2 500.0 5,280.1 768.0 Effect of foreign exchange rate changes on cash and cash equivalents 1.4 (4.2 ) 345.1 50.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase in cash and cash equivalents 499.2 22.8 5,022.6 730.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents at the beginning of the year 17.6 516.8 539.6 78.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents at the end of the year 516.8 539.6 5,562.2 809.0 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-GAAP Financial Measure To supplement our combined and consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use adjusted net loss, a non-GAAP financial measure, which is calculated as net loss adjusted for shared-based compensation expenses, share of loss in equity method investment and impairment loss on investment, to understand and evaluate our core operating performance. Adjusted net loss is presented to enhance investors' overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measure to its most directly comparable GAAP financial measures. As adjusted net loss has material limitations as an analytical metric and may not be calculated in the same manner by all companies, it may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider adjusted net loss as a substitute for, or superior to, net loss prepared in accordance with GAAP. We encourage investors and others to review our financial information in its entirety and not rely on any single financial measure.

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The table below sets forth a reconciliation of adjusted net loss to net loss for the periods indicated:

For the Year Ended

December 31,

2016 2017 2018

RMB RMB RMB US$

(in millions)

Net loss (782.9 ) (612.9 ) (876.3 ) (127.4 ) Add: Share-based compensation expenses 24.9 17.6 35.4 5.1 Share of loss in equity method investments 2.2 1.1 7.2 1.0 Impairment loss of investment   15.2 2.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted net loss (755.8 ) (594.2 ) (818.5 ) (119.1 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Key Operating Data The following table presents our key operating data for the periods indicated:

For the Year Ended

December 31,

2016 2017 2018

(in millions, except for average next-month

active user retention rate, quarterly

average paying ratio and quarterly

average ARPPU)

Average Next-Month Active User Retention Rate(1) 73.3% 75.2% 74.9% Quarterly Average Paying Ratio(2) 1.1% 2.2% 2.8% Average MAUs on PC Platform(3) 65.3 85.0 97.8 Average MAUs on Mobile Platform(3) 20.3 27.6 38.6 Average Total MAUs(4) 85.6 112.6 136.4 Quarterly Average Paying Users(5) 0.9 2.4 3.8 Quarterly Average ARPPU (RMB)(6) 164 156 208 Notes: (1) Average next-month active user retention rate for any period is calculated by dividing (i) the sum of next-month active user retention rate for each month of such period, by (ii) the total number of months in such period. Next-month active user retention rate is calculated by dividing (i) the sum of users who visited our platform through PC or mobile app at least once in the next month after a given month, by (ii) the sum of all active users in that given month. Next-month active user retention rate is only available from September 2016.



(2) Quarterly average paying ratio for a given period is calculated (i) the sum of paying ratio for each quarter of such period, by (ii) the number of quarters in such period. Paying ratio for a given quarter is calculated by dividing (i) the sum of paying users in such quarter, by (ii) the average total MAUs in such quarter.



(3) MAUs refers to the number of active users, including active PC users and active mobile users in a given month.



(4) Average total MAUs refers to the average total MAUs during a given period of time calculated by dividing (i) the sum of active users, including active PC users and active mobile users for each month of such period, by (ii) the number of months in such period.



(5) Quarterly average paying users refers to the average paying users for each quarter during a given period of time calculated by dividing (i) the sum of paying users for each quarter of such period, by (ii) the number of quarters in such period. Paying user refers to a registered user that has purchased virtual gifts on our platform at least once during the relevant period. A paying user is not necessarily a unique user, however, as a unique user may set up multiple paying user accounts on our platform, and consequently, the number of paying users we present in this prospectus may not equal to the number of unique individuals who made purchases on our platform for any given period of time.



(6) Quarterly average ARPPU refers to average live streaming revenue per paying user for each quarter during a given period of time calculated by dividing live streaming revenue for a given period by: (i) quarterly average paying users for that given period and (ii) number of quarters in that given period.

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RISK FACTORS



You should consider carefully all of the information in this prospectus, including the risks and uncertainties described below and our combined and consolidated financial statements and related notes, before making an investment in our ADSs. Any of the following risks and uncertainties could have a material adverse effect on our business, financial condition, results of operations and prospects. The market price of our ADSs could decline significantly as a result of any of these risks and uncertainties, and you may lose all or part of your investment.

Risks Related to Our Business and Industry

If we fail to retain our existing users, keep them engaged or further grow our user base, our business, operation, profitability and prospects may be materially and adversely affected.

The size of our user base and the level of our user engagement are critical to our success. Our main monetization strategieslive streaming, advertisement and others depend on our ability to maintain and increase the size of our user base and user engagement level. If our user base becomes smaller or our users become less active, it is probable that they would spend less on our virtual gifts and jointly operated games or visit our advertisements less frequently, or access our platform less in general. This would in turn drive top streamers away from our platform, discourage companies from purchasing advertisements on our platform and dissuade game developers and publishers from distributing their games through our platform. Our financial condition would suffer from the consequential decline in revenue and our business and operating results will be materially and adversely impacted.

According to iResearch, we ranked first among China's game-centric live streaming platforms in terms of the size of our user base as measured by average total MAUs on both mobile and PC platforms and the level of user engagement as measured by average total daily time spent by active users on our platform during the fourth quarter of 2017 and 2018. Maintaining and improving the current size of user base and level of user engagement are critical to our continued success. However, to maintain and improve this already large size of user base and high level of user engagement, we would have to ensure that we adequately and timely respond to changes in user preferences, attract and retain enough popular streamers, and offer new features and content that may attract new users. There is no guarantee that we could meet all of these goals. A number of factors could negatively affect user retention, growth and engagement, including if:

 we are unable to combat spam on or inappropriate or abusive use of our platform, which may lead to negative public perception of us and our brand;



 technical or other problems prevent us from delivering our services in a rapid and reliable manner or otherwise adversely affect the user experience;



 we fail to innovate our communities, user-generated content and our virtual gifts that keep our users interested and be eager to return to our platform on a regular basis;



 our streamers failed to keep our users engaged on our platform over a long period of time;



 we suffer from negative publicity, fail to maintain our brand or if our reputation is damaged;



 we fail to address user concerns related to privacy and communication, safety, security or other factors;



 there are adverse changes in our services that are mandated by, or that we elect to make to address, legislation, regulations or government policies; and



 the growth of the number of PC and smartphone users in China stalls.

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We may fail to attract, cultivate and retain top streamers, which may materially and negatively affect our user retention and thus our business and operations.

As of December 31, 2018, our streamer pyramid consisted of 6.0 million registered streamers, including more than 5,200 top streamers each of whom entered into an exclusive contract with us directly, approximately 384,800 streamers managed through talent agencies and the rest who are self-registered streamers. As of December 31, 2017, our platform had 3.9 million registered streamers, including more than 2,000 top streamers each of whom entered into an exclusive contract with us directly. Our top streamers tend to have large following bases who regularly support these streamers with virtual gifts, and they also tend to attract many integrated promotion activities during live streaming compared to self-registered streamers. Their charisma and the high-quality content that they create are primary contributors to user stickiness and are hard to replicate with self-registered streamers. In 2016, 2017 and 2018, our exclusive streamers accounted for 34.8%, 46.1% and 50.3% of our total live streaming revenue.

Although we have signed exclusive contracts with top streamers at typically three- to five-year terms that contain non-compete clauses, top streamers may still choose to depart us when their contract period ends, and their departure may cause a corresponding decline in our user base. As we attract top streamers from other platforms, we have also been involved in legal disputes concerning top streamers with competing platforms. Although we are not the primary target of these legal disputes, such streamers may be subject to fines or even injunctions which may render our investment in recruiting them meaningless. On the other hand, some of our top streamers have left us for competing platforms despite still being in contractual relationship with us which may raise legal disputes. Although we have won most of the legal disputes against these breaching streamers, their departures may still have a negative impact on user retention and reputation. To retain top streamers, we must devise better streamer compensation schemes, improve our monetization capabilities and help the top streamers reach a wider audience. Although we strive to improve ourselves in these two respects, we cannot guarantee that our streamers will not leave us even if we do our best to retain them.

In terms of streamer cultivation, we cannot guarantee that the performance metrics we use to track promising streamers will enable us to identify future top streamers. Some of the streamers we identify as promising may turn out to be underperforming, and we may also fail to spot truly promising streamers in early stages of their career. In addition to a waste of resources, either one of these scenarios could prevent us from cultivating top streamers, which could weaken our core competitive strength against competing platforms and thus cause an outflow of users to those platforms.

We may fail to offer attractive content, in particular popular game content, on our platform.

We offer comprehensive live streaming content with a primary focus on games. Our content library is constantly evolving and growing. Game content has been the key component of our content offerings since our inception, 72.0% of our streamers were game streamers as of December 31, 2018 and game streaming attracted 81.3% of viewership in terms of total viewing hours across our platform in the fourth quarter of 2018. In response to viewers' growing interests, we also have expanded our coverage into other entertainment content genres. We actively track viewership growth and community feedback to identify trending content and encourage our streamers and talent agencies to create content that caters to viewers constantly changing tastes. However, if we fail to expand and diversify our content offerings, identify trending and popular genres, or maintain the quality of our content, we may experience decreased viewership and user engagement, which may materially and adversely affect our results of operations and financial conditions.

In addition, we largely rely on our streamers to create high-quality and fun live streaming content. We have in place a comprehensive and effective incentive mechanism to encourage streamers and talent agencies to supply content that is attractive to our viewers. Also, talent agencies cooperating with

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us may guide or influence streamers to live stream content that is well received by our viewers. However, if we fail to observe the latest trends and timely guide streamers and talent agencies accordingly, or fail to attract streamers who are capable of creating content based on popular games, or if streamers fail to produce content for trending games, our viewer number may decline and our financial condition and results of operations may be materially and adversely affected.

We have significant reliance on the eSports industry.

As the nexus of the eSports ecosystem, our platform connects game developers and publishers, professional eSports teams or players and eSports tournament organizers, advertisers and viewers. User generated content covering eSports games is the largest contributor to our user base. Our average total eSports MAUs were approximately 80.9 million and 95.8 million in the fourth quarter of 2017 and 2018, respectively. In addition to streaming of eSports games, major eSports events and tournaments, we also sponsor leading eSports teams and organize our own eSports tournaments.

We rely heavily on a number of eSports games to generate our user traffic. For example, League of Legends, PlayerUnknown's Battlegrounds and King of Glory, the three most popular eSports games on our platform, each attracted over 40 million average total MAUs on our platform and in total generated over 1,050 million hours spent by our users during the fourth quarter of 2018. As a result, if we fail to maintain our market position in the eSports industry or to attract users through live streaming of popular eSports games, our user base and streamer base may shrink significantly. We may experience decreased viewership and user engagement, which may materially and adversely affect our results of operations and financial condition.

If we fail to effectively manage our growth and control our periodic spending to maintain such growth, our brand, business and results of operations may be materially and adversely affected.

We have experienced a period of significant rapid growth and expansion that has placed, and continues to place, significant strain on our management and resources. However, given our limited operating history and the rapidly evolving market in which we compete, we may encounter difficulties as we establish and expand our operations, research and development, sales and marketing, and general and administrative capabilities. We cannot assure you that this level of growth will be sustainable or achieved at all in the future. We believe that our continued growth will depend on our ability to attract and retain viewers and top streamers, develop an infrastructure to service and support an expanding body of viewers and streamers, explore new monetization avenues, convert non-paying users to paying users, increase user engagement levels and capitalize on the eSports industry. We cannot assure you that we will be successful with any of the above.

To manage our growth and maintain profitability, we expect our costs and expenses to continue to increase in the future as we anticipate that we will need to continue to implement, from time to time, a variety of new and upgraded operational, informational and financial systems, procedures and controls on an as-needed basis, including the continued improvement of our accounting and other internal management systems. We will also need to expand, train, manage and motivate our workforce and manage our relationships with viewers and streamers game developers and publishers, advertisers and other business partners. All of these endeavors involve risks and will require substantial management efforts and skills and significant additional expenditures. We expect to continue to invest in our infrastructure in order to enable us to provide our services rapidly and reliably to viewers and streamers. Continued growth could end up straining our ability to maintain reliable service levels for all of our viewers and streamers, develop and improve our operational, financial, legal and management controls, and enhance our reporting systems and procedures. Managing our growth will require significant expenditures and the allocation of valuable management resources. If we fail to achieve the necessary level of efficiency in our organization as we grow, our business, operating results and financial condition could be harmed.

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We have incurred net losses since inception, and we may continue to incur losses in the future.

We have incurred significant net losses to date. Although we generated positive gross profit for the first time recently in 2017 and then in 2018, such positive trend may not translate into a net after-tax profit. The time it will take for us to eventually achieve profitability hinges on our ability to grow rapidly in a cost-effective way, and we may not be able to grow this way successfully.

While our future revenue growth will be linked with the realization of our monetization strategies, which will be affected by user engagement, streamer retention and product offering, our cost-effective growth will primarily rely on improvement of operational efficiency, which has been reflected so far in the continually decreasing percentage of our content costs and bandwidth and server costs in our total operating costs. This trend of operational efficiency improvement may not continue in the future, or it may not reach a sufficient level to generate profitability. Our ability to continue to improve operational efficiency will depend on our ability to maintain stronger bargaining position in contract negotiations with top streamers, streamline our operation, achieve economies of scale and employ more advanced streaming technologies at lower cost, among other things. Additionally, our ability to achieve profitability is affected by various external factors, many of which are beyond our control, such as the PC and mobile games market and eSports industry in China, and the development of social networking, live streaming services and mobile marketing services. We cannot assure you that we will be able to improve our operational efficiency in the future.

We may again incur losses in the near future due to our continued investment in services, technologies, research and development and our continued sales and marketing initiatives. Changes in the macroeconomic and regulatory environment or competitive dynamics and our inability to respond to these changes in a timely and effective manner may also impact our profitability. Accordingly, we cannot assure you that our company will turn profitable in the short term just because we have made substantial investment in various areas.

Our business may suffer if we fail to successfully implement our monetization strategies.

Our monetization model is new and evolving. Our streaming platform is free to access, and we generate revenues primarily from live streaming and advertisement. As a result, our revenue is affected by our ability to increase user engagement and convert non-paying users into paying users, which in turn depends on our ability to offer content, virtual gifts, advertisements and other services. In 2016, 2017 and 2018, we generated RMB611.3 million, RMB1,521.8 million and RMB3,147.2 million (US$457.7 million) from live streaming, representing 77.7%, 80.7% and 86.1% of our total revenues for the same period. We also generate a sizeable portion of our revenues from providing advertisement and other services on our platform. In 2016, 2017 and 2018, we generated RMB175.6 million, RMB363.9 million and RMB507.2 million (US$73.8 million) from advertisements and others, representing 22.3%, 19.3% and 13.9% of our total revenues for the same period. We also generate a small portion of our revenue from game distribution, which involves revenue-sharing arrangements with game developers and publishers. If we are not successful in enhancing our ability to monetize our existing services or developing new approaches to monetization, we may not be able to maintain or increase our revenues and profits or recover any associated costs. We monitor market developments and may adjust our monetization strategies accordingly from time to time, which may result in decreases of our overall revenue or revenue contributions from some monetization channels. In addition, we may in the future introduce new services to diversify our revenue streams, including services with which we have little or no prior development or operating experience. If these new or enhanced services fail to engage customers or platform partners, we may fail to generate sufficient revenues to justify our investments, and our business and operating results may suffer as a result.

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Our content monitoring system may not be effective in preventing misconduct by our platform users and misuse of our platform and such misconduct or misuse may materially and adversely impact our brand image, business and operating results.

We are a game-centric live streaming platform that provides real-time streaming and interactions. Because we do not have full control over how and what streamers or viewers will use our platform to communicate, our platform may be misused by individuals or groups of individuals to engage in immoral, disrespectful, fraudulent or illegal activities. For example, we detect spam accounts through which illegal or inappropriate content is streamed or posted and illegal or fraudulent activities are conducted on a timely basis. Media reports and Internet forums have covered some of these incidents, which have in some cases generated negative publicity about our platform and brand. We have implemented control procedures to detect and block illegal or inappropriate content and illegal or fraudulent activities conducted through the misuse of our platform, but such procedures may not prevent all such content from being broadcasted or posted or activities from being carried out. Moreover, as we have limited control over real-time and offline behavior of our users, to the extent such behavior is associated with our platform, our ability to protect our brand image and reputation may be limited. Our business and the public perception of our brand may be materially and adversely affected by misuse of our platform.

In addition, if any of our viewers suffers or alleges to have suffered physical, financial or emotional harm following contact initiated on our platform or after watching unsettling or inappropriate content that our content monitoring system failed to filter out, we may face civil lawsuits or other liabilities initiated by the affected viewer, or governmental or regulatory actions against us. In response to allegations of illegal or inappropriate activities conducted through our platform or any negative media coverage about us, PRC government authorities may intervene and hold us liable for non-compliance with PRC laws and regulations concerning the dissemination of information on the Internet and subject us to administrative penalties or other sanctions, such as requiring us to restrict or discontinue some of the features and services provided on our website and mobile application, or even revoke our licenses or permits to provide Internet content service. We endeavor to ensure all streamers are in compliance with relevant regulations, but we cannot guarantee that all streamers will comply with all the PRC laws and regulations. Therefore, our live streaming service may be subject to investigations or subsequent penalties if content displayed on our platform is deemed to be illegal or inappropriate under PRC laws and regulations. As a result, our business may suffer and our user base, revenues and profitability may be materially and adversely affected.

Our limited operating history with a relatively new business model in a relatively new market makes it difficult to evaluate our business and growth prospects.

Our business operations commenced in 2014, with commercialization beginning midway through 2015. We experienced growth in the number of active and paying users and total revenue since 2016. However, our growth in 2016, 2017 and 2018 may not be indicative of our future performance, as our operating results represent a limited size of sample of operational results and may be hard to repeat in the future.

Many of the elements of our business are unique and evolving. The markets for our live streaming platform and the related products and services are relatively new and rapidly developing and are subject to significant challenges, especially in terms of converting non-paying users to paying users, maintaining a stable paying user base and attracting new paying users. Our business plan relies heavily upon an expanding user base and the resulting increased revenue from live streaming and advertisement, as well as our ability to capitalize on the eSports industry and explore other monetization avenues. We may not succeed in any of these aspects.

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As the live streaming industry in China is relatively young, there are few proven methods of projecting user demand or available industry standards on which we can rely. Some of our current monetization methods are also in a relatively preliminary stage. For example, if we fail to properly manage the volume and price of our virtual gifts, our users may be less likely to purchase them. We cannot assure you that our attempts to monetize our viewers and streamers will continue to be successful, profitable or accepted, and therefore the income potential of our business is difficult to gauge.

Our growth prospects should be considered in light of the risks and uncertainties that fast-growing early-stage companies with limited operating histories in evolving industries may encounter, including, among others, risks and uncertainties regarding our ability to

 develop new virtual gifts that are appealing to users;



 develop new advertisement formats that are appealing to advertising partners;



 maintain stable relationships with game developers and publishers; and



 expand to new geographic markets with good eSports environment and high growth potential.

Addressing these risks and uncertainties will require significant capital expenditures and allocation of valuable management and employee resources. If we fail to successfully address any of the above risks and uncertainties, the size of our user base, our revenue and operating margin may decline.

In our market, we mainly compete with other established streaming platforms and other entertainment mediums. If we are unable to compete effectively, our business and operating results may be materially and adversely affected.

Since running a successful live streaming platform requires intensive capital outlay and a large team of quality streamers, who remain in short supply due to the fact that most have signed contracts with existing platforms, there are high entry barriers for our industry. As a result, our major competitors are streaming platforms with an established presence in the industry. While such competition may only come from a few established players instead of many newcomers, competition remains intense. As it is unlikely that viewers will watch streams on two platforms at once, and most top streamers sign exclusive contracts with only one platform, we compete mainly for user traffic and top streamers. If we are not able to effectively compete with our competitors, our overall user base and level of user engagement may decrease, which may result in loss of top streamers to other platforms. Such loss may also lead to fewer paying users and make us less attractive to advertisers and game developers and publishers, which may adversely affect our monetization success.

To better compete with competitors which may have more cash, traffic, technological advantages, top streamers, business networks and other resources than we do, we may be required to spend additional resources, which may adversely affect our profitability. Furthermore, if we are involved in disputes with any of our competitors that result in negative publicity to us, such disputes, regardless of their veracity or outcome, may harm our reputation or brand image and in turn lead to reduced number of viewers and streamers. Our competitors may unilaterally decide to adopt a wide range of measures targeted at us, including approaching our top streamers, purchasing exclusive streaming rights to eSports tournaments or events that used to be streamed on our platform, or even attacking our platform. Any legal proceedings or measures we take in response to competition and disputes with our competitors may be expensive, time-consuming and disruptive to our operations and divert our management's attention.

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We believe that our ability to compete effectively depends upon many factors both within and beyond our control, including:

 the popularity, usefulness, ease of use, performance and reliability of our services compared to those of our competitors, and the research and development abilities of us and our competitors;



 changes mandated by, or that we elect to make to address, legislation, regulations or government policies, some of which may have a disproportionate effect on us;



 acquisitions or consolidation within our industry, which may result in more formidable competitors; and



 our reputation and brand strength relative to our competitors.

In addition, our users have a vast array of entertainment choices. Other forms of entertainment, such as traditional PC and console games, other online video services, social networking, as well as more traditional mediums such as television, movies and sports spectating, are much more well- established in mature markets and may be perceived by our users to offer greater variety, affordability, interactivity and enjoyment. Our platform competes against these other forms of entertainment for the discretionary time and spending of our users. If we are unable to sustain sufficient interest in our platform in comparison to other forms of entertainment, including new forms of entertainment that may emerge in the future, our business model may no longer be viable.

Our revenue growth is heavily dependent on paying users and revenue per paying user. If we fail to continue to grow or maintain our paying user and continue to increase revenue per paying user, our live streaming revenue may not increase, which may materially and adversely affect our business operation and financial results.

Our quarterly average paying users grew from 0.9 million in 2016 to 2.4 million in 2017 and further to 3.8 million in 2018. Moreover, our average revenue per paying user ("ARPPU") per quarter changed from approximately RMB164 in 2016 to RMB156 in 2017 and increased to RMB208 in 2018. Whether we can continue this trend of increasing paying ratio amongst our users depends on many factors, and many of them are out of our control. For example, our paying users may have less disposable income as they need to meet financial obligations elsewhere, they may decide to no longer support a particular streamer that they used to follow financially, and an overall worsening economic conditions can lower disposable income for all existing paying users, causing them to spend less on our platform. We expect that our business will continue to be heavily dependent on revenue collected from paying users in the near future. Any decline in the number paying users or our paying ratio may materially and adversely affect our results of operations. See "Our business may suffer if we fail to successfully implement our growth or monetization strategies."

We generate a portion of our revenues from advertisement. If we fail to maintain or grow advertisement revenue, our financial results may be adversely affected.

In 2016, 2017 and 2018, we generated RMB116.6 million, RMB248.8 million and RMB342.2 (US$49.8 million) million from the sale of advertisements, representing 14.8%, 13.2% and 9.4% of our total revenues for the same period. Our revenues from advertisement represent an important part of our total revenue, and our financial results could be adversely affected if we fail to maintain or grow it in the future. For us to maintain or grow our advertisement revenue, we need to attract more advertisers to our platforms with our increased user traffic and engagement level, or offer more variety in terms of advertisement products that encourage more spending from advertisers. We offer (i) integrated promotion activities during live streaming, (ii) advertisement display, and (iii) online and offline events-related advertisements. We expect to introduce more integrated promotion activities that are engaging, creative and fun and hold events that are sponsored by advertisers, who have naming

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rights to these events. Failure to do so may adversely impact our advertisement revenue. In addition, traditional display advertisements are subject to time and space restrictions, especially when displayed on mobile devices which have become popular among our users. As a result, our business and results of operations may be adversely impacted.

Advertisement revenue is also affected by online advertising industry in China and advertisers' allocation of budgets to Internet advertising and promotion. Companies that decide to advertise or promote online may utilize more established methods or channels for online advertising and promotion, such as more established Chinese Internet portals or search engines, over advertising and promotion on our platforms. If the online advertising market size does not increase from current levels, or if we are unable to capture and retain a sufficient share of that market, our ability to maintain or increase our current level of advertisement revenue and our profitability and prospects could be adversely affected.

If we fail to obtain or maintain the required licenses and approvals or if we fail to comply with laws and regulations applicable to our industry, our business, financial condition and results of operations may be materially and adversely affected.

The Internet industry in China is highly regulated, which requires certain licenses, permits, filings and approvals to conduct and develop business. Currently, we have obtained the following valid licenses through our PRC variable interest entities: ICP License for provision of Internet information services, Internet Culture Operation License for operating online games and music products, Commercial Performance License for providing streamer agency services, License for Online Transmission of Audio/Video Programs for providing online streaming of video and Radio and Television Program Production and Operating Permit for producing radio and television program.

Due to the uncertainties of interpretation and implementation of existing and future laws and regulations, the licenses we held may be deemed insufficient by governmental authorities, which may restrain our ability to expand our business scope and may subject us to fines or other regulatory actions by relevant regulators if our practice is deemed as violating relevant laws and regulations. As we develop and expand our business scope, we may need to obtain additional qualifications, permits, approvals or licenses. Moreover, we may be required to obtain additional licenses or approvals if the PRC government adopts more stringent policies or regulations for our industry.

For example, according to the Administrative Provisions for Audio/Video Programs Services through Internet which was promulgated by the State Administration for Radio, Film and Television (the "SARFT") (which is the predecessor of the State Administration of Press, Publication, Radio, Film and Television), came into effect on January 31, 2008, and amended on August 28, 2015 (the "Audio/Video Measures"), to engage in the business of transmitting audio/video programs, a License for Online Transmission of Audio/Video Programs is required. We have obtained the License for Online Transmission of Audio/Video Programs for offering live video programs on our platforms. We are currently applying to expand the scope of our License for Online Transmission of Audio/Video Programs and there is no guarantee that we will be successful in doing so. License for Online Transmission of Audio/Video Programs is subject to periodical renewal. Although we have successfully renewed it in the past, there is no guarantee that we will be able to continue to do so in the future. We may not be able to continue to hold the License for Online Transmission Audio/Video Programs, and the scope specified in our License for Online Transmission Audio/Video Programs may not be able to cover all the needs that arise or will arise in our operations from time to time. Failure to expand the scope of our current License for Online Transmission of Audio/Video Programs or to continue to hold such license may result in fines or other penalties being imposed to us, which may adversely affect our business. In addition, for the purpose of providing Internet audio/video program service, we have adopted and will adopt various operating strategies and measures. Due to the uncertainties of interpretation and application of pertinent laws by the government authority, such strategies and measures may be challenged under PRC laws and regulations and if so, we may be subject to fines,

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confiscation of income related or other penalties and, in certain circumstances, suspension or revocation of the license, which may materially and adversely affect our business.

In addition, publishing and the commercial launch of domestic online games is subject to the pre-approval by the National Radio and Television Administration (the "NRTA") and the post-filing requirements with the Ministry of Culture and Tourism (formerly known as the Ministry of Culture, the "MCT"), while the commercial launch of imported online games is subject to pre-approval by both of the NRTA and the MCT. Although the game publishers are responsible for obtaining the required approvals, filings or permits for these online games streamed or operated on our platform, we may be subject to fines, confiscation of income from these games, suspension of operations, revocation of licenses and other penalties due to game publishers' failure to obtain such approvals, filings or permits, which could materially and adversely affect our business and results of operations. With respect to pre-approval for publishing of online games, the NRTA suspended such permission from March to December 2018 and have since restored it. As for the post-filing requirements for commercial launch of online games, the MCT has suspended such permission since June 2018 and has not restored it as of the date of this Prospectus. As a result, game publishers may not be able to obtain approval or make filings for games they operate that were not approved by, or filed with the NRTA or MCT. Furthermore, if more stringent regulations were adopted or the government authority takes more strict regulation or action against online games industry in the future, it might be increasingly difficult to introduce or operate new online games streamed or operated on our platform, which will adversely affect our business.

As the Internet industry in China is still at a relatively early stage of development, new laws and regulations may be adopted from time to time to address new issues that come to the authorities' attention. Considerable uncertainties still exist with respect to the interpretation and implementation of existing and future laws and regulations governing our business activities. We could be found in violation of any future laws and regulations or any of the laws or regulations currently in effect due to changes in the relevant authorities' interpretation of these laws and regulations.

As of the date of this prospectus, we have not received any material penalties from the relevant government authorities for our past operations. We cannot assure you, however, that the government authorities will not do so in the future. In addition, we may be required to obtain additional license or permits, and we cannot assure you that we will be able to timely obtain or maintain all the required licenses or permits or make all the necessary filings in the future. If we fail to obtain, hold or maintain any of the required licenses or permits or make the necessary filings on time or at all, we may be subject to various penalties, such as confiscation of the net revenues that were generated through the unlicensed activities, the imposition of fines and the discontinuation or restriction of our operations. Any such penalties may disrupt our operations and materially and adversely affect our business, financial condition and results of operations.

We may be subject to intellectual property infringement claims or other allegations by third parties for information or content displayed on, retrieved from or linked to our platform, or distributed to our users, or for proprietary information appropriated by former employees, which may materially and adversely affect our business, financial condition and prospects.

We have been and may in the future be subject to intellectual property infringement claims or other allegations by third parties for services we provide or for information or content displayed on, retrieved from or linked to, recorded, stored or make accessible on our platform, or otherwise distributed to our users, including in connection with the music, movies, video and games played, recorded, stored or make accessible on our platform during streaming, which may materially and adversely affect our business, financial condition and prospects.

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Under our agreements with streamers, we obtain the intellectual property arising from live-streaming on our platform. We have implemented internal control measures to ensure that the design of our platform and the content that is streamed on it does not infringe on valid intellectual property, such as patents and copyrights held by third parties. We also license certain intellectual properties from third parties to implement certain functions available on our platform.

However, companies in the Internet, technology and media industries are frequently involved in litigation based on allegations of infringement of intellectual property rights, unfair competition, invasion of privacy, defamation and other violations of other parties' rights. In China, the validity, enforceability and scope of protection of intellectual property rights in Internet-related industries, especially in our evolving live streaming industry, are uncertain and still evolving. We face, from time to time, and expect to face in the future, allegations that we have featured pirated or illegally downloaded music and movies on our platform, and that we have infringed on the trademarks, copyrights, patents and other intellectual property rights of third parties, including our competitors, or allegations that we are involved in unfair trade practices. Some of the game streaming on our platform may be alleged to infringe on the copyright in works of literature and art of a game of the game producers, which may also constitute an unfair competition claim. As we face increasing competition and as litigation becomes a more common method for resolving commercial disputes in China, we face a higher risk of being the subject of intellectual property infringement claims or other legal proceedings.

We allow streamers to upload text, graphics, audio, video and other content to our platform and users to download, share, link to and otherwise access games and other content on our platform and we also upload high-quality video clips recorded and restored from selective live streaming content. Under relevant PRC laws and regulations, online service providers, which provide storage space for users to upload works or links to other services or content, could be held liable for copyright infringement under various circumstances, including situations where the online service provider knows or should reasonably have known that the relevant content uploaded or linked to on its platform infringes upon the copyright of others and the online service provider failed to take necessary actions to prevent such infringement. We have procedures implemented to reduce the likelihood that content might be used without proper licenses or third-party consents. However, these procedures may not be effective in preventing the unauthorized posting or distribution of copyrighted content and we may be considered failing to take necessary actions against such infringement. Therefore, we may face liability for copyright or trademark infringement, defamation, unfair competition, libel, negligence, and other claims based on the nature and content of the materials that are delivered, shared or otherwise accessed through our platform.

Certain of our employees were previously employed at other peer companies, including our current and potential competitors. To the extent that these employees are involved in the development of content or technology similar to ours at their former employers, we may become subject to claims that such employees or we may have appropriated proprietary information or intellectual properties of the former employers of our employees. If we fail to successfully defend such claims, our results of operations may be materially and adversely affected.

Defending claims is costly and can impose a significant burden on our management and employees, and there can be no assurances that favorable final outcomes will be obtained in all cases. Such claims, even if they do not result in liability, may harm our reputation. Any resulting liability or expenses, or changes required to our platform to reduce the risk of future liability, may have a material adverse effect on our business, financial condition and prospects.

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We may be held liable for information or content displayed on, retrieved from or linked to our platform, or distributed to our users if such content is deemed to violate any PRC laws or regulations, and PRC authorities may impose legal sanctions on us.

We are a live streaming platform that enables our users to exchange information, generate content, advertise products and services, and engage in various other online activities. Although real-name registration is required for streamers by our platform, we may not be able to verify the identity information provided by our streamers as true and accurate. For registration of users, we verify identities primarily based on verification text messages sent to their mobile devices, which may not always be reliable. As a majority of the video and audio communications on our platform is conducted in real time, cannot filter the content generated by our streamers and users on air before they are streamed on our platform. Therefore, users may engage in illegal conversations or activities, including the publishing of inappropriate or illegal content on our platforms that may be unlawful under PRC laws and regulations.

We require users to agree to our terms of service upon account registration. Our terms of service set out types of content strictly prohibited on our platform, and we have also developed a robust content monitoring system. However, although we use our best efforts to monitor content on our platform, we cannot detect every incident of inappropriate content on our platform due to the immense quantity of user-generated content on our platform, and as such government authorities may hold us liable for inappropriate content on our platform. In addition, application stores