Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 1.12, representing a potential upside of 27.3% from the recent closing price of HKD 0.88 [7][9]. Core Insights - The company recorded revenue of RMB 6.84 billion in 2023, an increase of 8.3% year-on-year, with a gross margin improvement of 1.1% to 41.4%. Net profit surged by 337.8% to RMB 400 million, while adjusted net profit grew by 9.9% to RMB 430 million [7]. - The core business showed steady growth, with strategic adjustments made in the second half of 2022 to address industry competition and regulatory changes. The company's live streaming and social business segments have rebounded, providing solid cash flow support for diversified development [7]. - The short drama business has emerged as a significant growth driver, contributing RMB 960 million in revenue, accounting for 14% of total revenue. The market for micro-short dramas has expanded rapidly, with a reported growth of 268% year-on-year [7]. - The company successfully expanded its overseas operations, achieving substantial revenue growth and enhancing its brand presence through localized strategies in various global markets [7]. Financial Summary - The company’s cash position is robust, with net cash (excluding investment management) estimated at RMB 2.36 billion, significantly exceeding its current market capitalization [7]. - The projected earnings for 2024 are valued at a price-to-earnings ratio of 5x, supporting the target price of HKD 1.12 [7]. - The company has optimized resource allocation to strengthen its user base and commercial monetization capabilities, particularly in the social and matchmaking sectors [7].
在手现金充裕，期待短剧业务带来增长新动力