Incident: The company released its semi-annual report for 2023. In the first half of the year, it achieved revenue of 2,364 million yuan, a year-on-year increase of 42.27%, a year-on-year net profit of 40.21 million yuan, an increase of 758.36% over the previous year, after deducting non-return net profit of 6.73 million yuan, a year-on-year increase of 152.70%, slightly higher than the median of the previous performance forecast.

Our reviews are as follows:

The net profit of Gimu improved month-on-month. 5G rich media news and rapid growth in international business 23H1 The company's net profit grew rapidly. Looking at a single quarter, 23Q2 achieved 29.2 million yuan in net profit, an increase of 165.2% over the previous month, continuing to improve. During the 23H1 period, 5G rich media messaging business volume increased 136% year on year, revenue increased 155.81% year on year; international cloud communication business volume increased 274% year on year, and revenue increased 324.98% year on year. The revenue and profit share of new businesses such as 5G rich media messaging in the company has been steadily increasing. New business growth is the main engine of the company's performance growth.

Lay out the AI application field, combine its strengths to empower the business development company as a leading enterprise in the 5G rich media messaging business. Based on NLP, combined with cloud mapping, speech recognition and other technologies, chatbot is used as the carrier to create a one-stop intelligent 5G messaging service. It has complete technical capabilities, has independent intellectual property rights, and already has intelligent robot application scenarios that combine the needs of enterprise customers and individual user interaction habits. In terms of chatbot robots, compared to ChatGPT, which is popular abroad, is only a difference in technical implementation solutions, the company is also simultaneously researching modular integration methods, which can enable customers to quickly introduce existing robot services and share resources. The company's AIM News provides customers with powerful display and tracking capabilities for thousands of people and thousands of people. Customers can realize personalized scenario marketing and services through their own data mining, which is a natural AI application portal for customers in the field of service marketing. At the same time, Dream Network has created and launched a customer-side privatized data and AI platform. Customers can quickly connect with its internal applications based on this platform to achieve a package of business upgrades based on data mining, customer portraits, and accurate distribution. At present, the company has signed a business cooperation framework agreement with HUAWEI Cloud Panguda Model. The company combines the Pangu model to create “AI+5G messaging” to further explore the potential of combining messaging service scenarios and create intelligent messaging service solutions for customers.

The development of the 5G messaging industry continues to advance, and the company's competitive advantage is remarkable. The future can be expected. On July 19, the Ministry of Industry and Information Technology publicly solicited comments on the “Notice on Strengthening End Network Collaboration to Help the Scale Development of 5G Messaging” (draft for comments). Among them, it is pointed out that mobile phone manufacturers have completed the design and function upgrades of 5G mobile phone systems planned for listing in accordance with industry standards related to 5G messaging and network access inspection specifications. After the transition period is over, 5G phones newly applied for Internet access by mobile phone manufacturers need to support 5G messages and provide relevant network access test reports. For 5G mobile phone model products that have applied for access to the Internet before the end of the transition period, mobile phone manufacturers that are in a position to do so are encouraged to implement 5G messaging function support through product system upgrades, etc. The company's cloud communication service business has formed a core competitive advantage in terms of technical advantages, customer resources, and operator channels. As early as 2018, Dream.com began deploying video text messaging. Dream.com is one of the earliest companies in the industry to commercially operate video messaging. In terms of industry solutions, after nearly five years of in-depth company development, the company has formed large-scale template accumulation. Video SMS has covered various industry application scenarios such as banking, securities, funds, automobiles, beauty, apparel, catering, film and television, travel, aviation, gaming, etc.; in terms of customer resources, the company has always adhered to the customer-centric concept. Over the past 20 years, the company has completed the market layout of emerging important industries and customers such as finance, the Internet, government and public services, and consumer goods, and has established and maintained close cooperative relationships with major customers in the industry; in terms of cooperation with terminal manufacturers, the company has successively cooperated with China in recent years It has established cooperative relationships with well-known terminal manufacturers at home and abroad, such as Xiaomi, OPPO, vivo, Samsung, Meizu, and ZTE, and has accumulated good advantages for upgrading the terminal's native basic messaging service. Based on core technology accumulated in the field of communications and terminal services, the company has reached cooperation with Huawei, Xiaomi, OPPO, and VIVO to support 800 million terminal coverage and online operations, forming exploration and layout with many upstream and downstream enterprises.

Profit forecasts and investment suggestions:

As a leading cloud communication service provider in China, the company is not only growing bigger and stronger in the field of enterprise SMS, but also closely follows the pace of 5G network construction and lays out 5G messaging. Cloud communication services cover many fields. As 5G news progresses on a large scale, Dream Network relies on strong technology research and development capabilities and service capabilities to quickly transform and upgrade customer needs, which is conducive to medium- to long-term market expansion. The company's net profit to parent is estimated to be 2.05/342/559 million yuan in 23-25, maintaining the “increase in holdings” rating.

Risk warning: 5G message development falls short of expectations, risk of operator policy changes, increased market competition, risk of impairment of goodwill, etc.