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WBWB(WB) 招银国际·2024-05-27 03:22

Investment Rating - The report maintains a "Buy" rating for the company, indicating a potential upside of 93.8% from the current price of 8.77toatargetpriceof8.77 to a target price of 17.00 [2][3]. Core Insights - The company's total revenue for Q1 2024 decreased by 4% year-over-year to 395million,aligningwithconsensusestimates.Non−GAAPnetincomealsofellby4395 million, aligning with consensus estimates. Non-GAAP net income also fell by 4% to 107 million, exceeding consensus estimates by 24% [2]. - Advertising revenue showed a mixed performance, with a 5% decline year-over-year to 339million,primarilyduetopressureinthecosmeticsandbeautyverticals.However,domesticbeautybrandssawover50339 million, primarily due to pressure in the cosmetics and beauty verticals. However, domestic beauty brands saw over 50% growth in advertising revenue [2][3]. - The company has adjusted its revenue forecasts for FY24-26 down by 2% to reflect the shrinking advertising budgets of cosmetics and beauty brands [2][3]. Revenue and Profitability Summary - FY22A revenue was 1,836 million, FY23A was 1,760million,andFY24Eisprojectedat1,760 million, and FY24E is projected at 1,724 million, with a slight recovery expected in FY25E and FY26E [3][10]. - Adjusted net profit for FY22A was 540.1million,FY23Awas540.1 million, FY23A was 450.6 million, and FY24E is expected to be 447.4million,indicatingadeclineinprofitability[3][10].−Thereporthighlightsanon−GAAPoperatingprofitmargin(OPM)of31.8447.4 million, indicating a decline in profitability [3][10]. - The report highlights a non-GAAP operating profit margin (OPM) of 31.8% for Q1 2024, an increase of 0.7 percentage points year-over-year, attributed to strict control over operating costs [2][3]. User Engagement Metrics - Monthly Active Users (MAU) decreased by 1% year-over-year to 588 million, while Daily Active Users (DAU) remained stable at 255 million. The company is focusing on acquiring high-quality users [2][3]. - The report indicates that the company is investing in key content verticals such as automotive, online gaming, and healthcare to enhance user interaction and verified account growth [2][3]. Financial Position - As of March 31, 2024, the company had cash and cash equivalents of 2.1 billion, sufficient to cover upcoming debt obligations and shareholder return plans [2][3]. - The report notes a projected decline in non-GAAP OPM to 32.9% for FY24E, reflecting ongoing operational challenges [2][3].