Weibo's non-GAAP shareholders' net profit for the first quarter of 2022 increased 1.7% year over year to $133 million, higher than market expectations.

Advertising and marketing revenue was US$427 million, up 9.5% year over year, mainly due to the resilient performance of advertising. Value-added service revenue fell 16.5% year over year to $58 million due to the decline in membership and live streaming services. Weibo suffered a net loss of GAAP shareholders of $68 million, mainly due to investment losses due to changes in fair value and impairment.

On the user side, Weibo had 582 million monthly active users in March 2022, up 9.8% year on year and 1.6% month on month. The average number of daily active users was 252 million, up 9.6% year over year and 1.2% month on month. The ratio of daily active users to monthly active users fell slightly by 0.1 percentage points year over year and 0.2 percentage points from month to month to 43.3%.

We expect Weibo revenue of $2,168 billion, $2,377 million, and $2,471 million in 2022-2024, respectively, corresponding to year-over-year increases of -3.9%, 9.6%, and 4.0%. On the advertising and marketing side, the resurgence of COVID-19 dragged down the recovery in 2022. In terms of value-added services, we expect a year-over-year decline in 2022.

We maintained our “collected” investment ratings, but lowered our target price to HK$243.00. We expect Weibo's non-GAAP shareholder net profit to grow -11.8%, 11.5%, and 8.5% year-over-year in 2022-2024 to $634 million, $707 million, and $766 million; we also expect profit margins to decline. Our target prices are equivalent to 11.5 times, 10.2 times, and 9.4 times the 2022 to 2024 non-GAAP price-earnings ratio, respectively.