The company released its results for the first half of 2023. During the reporting period, the company's 2023H1 operating income was 212 million yuan, down 25.04% from the same period last year, and its net profit was 7.9435 million yuan, down 71.66% from the same period last year. 2023Q2 operating income alone was 105 million yuan, down-14.74% from the same period last year, and its net profit was 6.2895 million yuan, down 45.40% from the same period last year, slightly lower than previously expected.

The marginal improvement of the marketing market is obvious, and the company's performance may improve in the second half of the year. The company's traditional business is Internet precision marketing, which is directly related to the market economy, so it received the impact of market confidence in the first half of 2023, and customer advertising costs still declined, leading to a decline in the company's performance. However, with the gradual recovery of the economy and the gradual increase of consumer confidence and business activity, advertisers' delivery strategy is moving towards high-quality and fine operation. And according to CTR Media Intelligence data, the overall spending of the Q1 Chinese advertising market in 2023 fell 4.5% from the same period last year, slightly narrowing compared with the same period last year, with a marked marginal improvement. At the same time, information technology iterations are driving the upgrading of the advertising marketing industry. At a time of recovery and change, the delivery strategy of advertisers has also undergone a qualitative change, from the original traditional mode of pursuing scale expansion to the high-quality development of "integration of quality and effect" based on big data's meticulous operation. it also pays more attention to the compliance use of data. The company's highly refined, efficient and highly intelligent marketing technology and advertising marketing service providers that can achieve a secure computing environment can better meet the increasing needs of advertisers and are expected to get more market opportunities.

The data element market continues to drive, focusing on the opportunities for the outbreak of the company's new growth line. As an early participant in the data element market, the company has formed a strong competitive strength by virtue of its solid data base, profound data governance ability and rich industry landing experience. In terms of government data, the company actively explores the combination of data intelligence and public services, providing "standardized" components and systematic solutions of data intelligence for relevant government departments and enterprises and institutions at all levels in public fields such as emergency management, earthquake resistance and disaster reduction, public services, population and spatial planning, law popularization and publicity. In terms of marketing data, the cumulative installation of developer service SDK exceeded 100 billion, of which the cumulative installation of intelligent IoT device SDK exceeded 300 million, the number of daily active users and the number of independent devices remained stable, and continued to maintain a leading position in the industry. With the landing of the National data Bureau and the introduction of data policies in various prefectures and cities, the top-level design is expected to be further improved. It is suggested that we should pay attention to the investment opportunities of data elements under intensive catalysis.

Profit forecast and investment advice: we expect the company's operating income from 2023 to 2025 to be RMB 583 million, respectively, with a net profit of RMB 0.276 pm, and a PE of 215X/103X/63X, respectively, maintaining the "Buy" rating.

Risk hint: the risk of macroeconomic fluctuation and the commercial development of data elements are not as good as expected.