Incident: On August 10, the company released the 2023H1 performance report. 2023H1 achieved operating income of 350 million yuan, +102.7% over the same period, and net profit of 38.82 million yuan, turning a loss into a profit.
Various businesses have recovered, and profit indicators have increased month-on-month. In terms of revenue: During the reporting period, the company achieved revenue of 28.193 million yuan/year-on-year +160.35%, accounting for 80.0%; digital marketing and promotion services revenue of 61.618 million yuan/-5.4% year-on-year, accounting for 17.6%; IP expansion business achieved revenue of 84.51 million yuan, achieving revenue of 40,000 yuan in the same period last year. Among them: 1) Experiential marketing business:
The successful completion of multi-brand activities including Archeopteryx, Cartier, Chanel, DIOR, GUCCI, LV, and MERCEDESBENZ once again proved its professional ability; 2) Digital marketing business: The company continued to provide online marketing services to multiple brands during the reporting period, but revenue declined slightly year-on-year due to some brands re-allocating marketing budgets offline; 3) IP business expansion, Shanghai Design Week, etc. were gradually held and recovered one after another. In terms of profitability, the company's gross margin fell slightly by 0.5pct year on year to 30.0%, mainly due to the restoration of the business structure and the increase in revenue from experiential marketing; the sales expense ratio fell 10.7 pct to 10.49% year on year, mainly due to revenue recovery; without considering equity incentive expenses, the management fee ratio fell 5.85 pct year on year to 5.93%, mainly due to revenue recovery. Overall, the company achieved net profit of 38.82 million yuan in 2023H1, turning losses into profits, improving profit and increasing month-on-month.
Pan-Fashion Data Interactive Marketing Group continues to explore diversified business layouts, increasing the share of the main business market. As a leading pan-fashion data interactive marketing company in China, the company has rich team experience, a stable customer base, and outstanding online and offline integration advantages; its luxury experience marketing business has an advantage over peers. According to the company's announcement, the market share will further increase to 10% in 2022; and with the accumulation of original brands and personnel, the market share will further increase to 10%; and with the accumulation of original brands and personnel, it adapts to the trend of online marketing and diversification, integrating all channels and continuously increasing collaboration.
Investment advice: In the long run, the rise of top international brands in the domestic market and domestic brands is a long-term trend. As a pan-fashion data interactive marketing group that has established long-term partnerships with top brands, the company will benefit. It is continuously increasing to promote omni-channel integration and consolidate competitive advantages. We expect the company to achieve net profit of 110 million/134 million/157 million yuan respectively from 2023 to 2025, maintaining a “buy” rating, with a target price of HK$2.4.
Risk warning: competition in the industry has seriously intensified; consumption falls far short of expectations.