The annual income of Tiger TV Media (01163.HK) increased by 32.7% to 1.9 billion yuan in the first half of 2022 compared with the same period last year, mainly due to an increase in the number of customers in the education and financial industries. Customers developed by utility tools and content applications remain the main source of revenue for the collection, accounting for about 42.7% of the total revenue in the first half of 2022. However, the gross profit margin of the market fell by 6.6 percentage points year-on-year over the same period, resulting in a 54.0% drop in profit margin compared with the same period last year, while the profit margin fell to 3.3%.

In a weak market, the next consumer income still recorded growth: in the first half of 2022, business education and financial industry income growth was encouraging. In particular, China's education industry has continued to be in the doldrums since the reform policy last year, and those who seek to survive are willing to expand and put their claims in overseas markets. In addition, Marketplace also succeeded in collecting customers from financial institutions and helped them launch announcements in the global market, which was triggered by a 12.7x year-on-year increase in customer income from financial institutions.

Interest rates remain low and reverse in the short term: 2022 is still a provocative year for agencies, with an uncertain outlook weakening customer demand and its overall forecast. Although we understand the need for Tiger TV Media (01163.HK) to adopt a low-interest strategy to maintain customer relations, it is inevitable to suffer interest rates in today's provocative market.

In the unfavorable market environment, underestimation is still the main reason for maintaining "investment": we are pleased that 01163.HK is still actively looking for new growth dynamics in a weak and provocative environment, especially AI dubbing, 3D personalization, and real-life technology can effectively reduce input costs, but we think that the targeted strategy will still improve the profit rate. Therefore, we maintain the revenue forecast for the market to reflect the revenue-based development strategy of the cluster, ii) the haircut rate is expected to be 1.0ppm-2.3ppm, iii) the lower profit rate is expected to be 0.9ppm-2.0ppm and the profit reduction forecast is 19.7-44.3 per cent. We believe that the sharp decline in market stocks partly reflects their positive outlook, the rising discount rate and the valuation closing caused by the weak market atmosphere. However, I believe that the valuation at the time of the market is on the low side, and even if we take into account the factors of volatility and rising margin spillover, we still believe that the current valuation can provide sufficient defense. Therefore, we maintain the collective "premium" level, but cut the target to HK $0.42 per share, which is similar to the 19.0x/11.5x/8.9x forward price-earnings ratio of 2022 / 2023 / 2024.