四季度广告业务压力持续，食品饮料、汽车、手机行业广告主表现相对较好。4Q22 公司广告业务收入3.91 亿美元，同比下降29.1%，环比基本持平，主要由于疫情影响广告主投放计划。分行业看，食品饮料广告主受到世界杯带动，4Q22 于微博投放实现正增长；汽车、手机行业广告主则受益于新品发布，微博广告投放亦取得较好增速。4Q22 增值服务收入5,745 万美元，同比下降12.2%，环比下降4.5%，其中会员业务由于文娱生态调整表现承压，社交电商业务重点尝试高客单医美行业，2022 全年医美电商GMV实现翻倍。Performance review
4Q22 Non-GAAP homing net profit excluding one-time fee adjustment is basically in line with our expected 4Q22 results: revenue is $448 million, down 27.3% from the same period last year, down 1.2% from the previous year, mainly due to the impact of the epidemic on advertisers' plans, we forecast $438 million Non-GAAP 's homing net profit is $179 million, down 8.7% from a year earlier and up 50.0% from a month earlier. There is an one-time reversal of about $58.8 million in management fees, and we expect $118 million.
Trend of development
The pressure of advertising business continued in the fourth quarter, and advertisers in the food and beverage, automobile and mobile phone industries performed relatively well. 4Q22's advertising revenue was US $391 million, down 29.1% from the same period last year, which was basically unchanged from the previous month, mainly due to the impact of the epidemic on advertisers' delivery plans. From a sub-industry point of view, food and beverage advertisers are driven by the World Cup, and 4Q22 in Weibo Corp has achieved positive growth; automobile and mobile phone industry advertisers have benefited from new product release, and Weibo Corp advertising has also achieved better growth. The revenue of 4Q22 value-added services was US $57.45 million, down 12.2% from the same period last year and 4.5% from the previous year. Among them, the member business was under pressure due to the adjustment of cultural and entertainment ecology, and the social e-commerce business focused on the high-customer medical and beauty industry, and the medical and beauty e-commerce GMV doubled in 2022.
The ability of cost control is robust, and there is an one-time reversal of management expenses. In terms of cost, 4Q22 gross profit margin was 76.3%, a month-on-month decline in 2.9ppt, mainly due to World Cup copyright expenses, personnel optimization costs, and so on. In terms of expense rate, as the investment company Mask Technology failed to achieve the previous performance bet target, the management fee was recharged back to about US $58.8 million; excluding the one-time charge reversal, the 4Q22 Non-GAAP net interest rate was basically flat, showing the sound operating ability accumulated by the company after many years of operation.
As the business picks up, we should pay attention to the changes in the trend of economic recovery and investment. The company said that partial repair of the business has been observed in January and February, but most advertisers' marketing plans have not yet begun to be significantly adjusted, and the budget may have to wait until 2Q23; from the industry point of view, automobile and luxury customers are expected to continue to grow well in 2023, the beauty and makeup industry may resume with 2H23, and the game industry will benefit from the release of version numbers and have further growth opportunities. From the perspective of advertising strategy, the company plans to focus on promoting the combined marketing model of product effect and content hotspots in 2023, giving full play to Weibo Corp's core ecological advantages of bringing together media, stars and KOL.
In addition, Hang Seng Index companies announced the results of regular index adjustments, and the Hang Seng Technology Index is included in Weibo Corp-SW (9898.HK), which is expected to take effect on March 13. We suggest to pay attention to the advertiser budget adjustment signal in the 1H23 e-commerce promotion node, as well as the further pick-up of advertising demand driven by the economic recovery.
Profit forecast and valuation
Taking into account the recovery of the environment, we raised the revenue of 2023 Non-GAAP 2024 by 4% and 1%, but due to the gradual recovery of the company's investment in content, channels, etc., we maintained the profit forecast for 2023max 2024 and outperformed the industry rating and the Hong Kong stock / US stock target price of HK $194.0 / US $25.0, which corresponded to 11.2 times 2023E / US stock price. The company's Hong Kong shares are currently traded at 9.8max 7.2x 2023max Non-GAAPP/E in 2024, and US stocks are traded at 6.8x 2023max Non-GAAPP/E in 2024. The target price upward space for Hong Kong stocks / US stocks is 13.4% and 20.9% respectively.
Risk
Macroeconomic and consumer demand recovery is lower than expected, industry regulatory policies continue to strengthen, industry competition intensifies, investment impairment risk.