Main points of investment

Event: in the first three quarters of 2023, the company achieved revenue of 959 million yuan, an increase of 17.64% over the same period last year; net profit of 14 million yuan, a decrease of 46.53% over the same period last year; for 23Q3, revenue of 282 million yuan, an increase of 34.96% over the same period last year, and net profit of-14 million yuan, a decrease of 331.13%.

Revenue is higher than the same period last year, and Q4 performance is expected to grow with the launch of the e-commerce festival: 23Q3, the company achieved revenue of 282 million yuan, an increase of 34.96% over the same period last year; in the first half of the year, the company achieved rapid growth in new business, and we expect new business growth in the third quarter to still contribute to performance increment. At present, "what is worth buying" has been launched in the double 11 activity area, with the development of the e-commerce festival, the company's Q4 is expected to usher in the business peak and achieve performance growth.

The year-on-year decline in gross profit margin has put pressure on the profit end of 23Q3: 23Q3, the company's gross profit margin is 42.81%, down 9.89 pct from the same period last year. We believe that the change in revenue structure is mainly due to the investment in business development and the rapid growth of new business with low gross margin. The management and control of the company's cost side achieved good results. The 23Q3 sales expense rate, management expense rate and R & D expense rate were 19.94%, 15.77% and 13.80% respectively, a decrease of 3.23 pct 0.51 pct over the same period last year.

AI reconstructs core products and operating processes to improve operational efficiency: the company actively embraces artificial intelligence and reconstructs core products and operational processes through AIGC technology to improve the overall operational efficiency of "what is worth buying": 1) in terms of content production, "what is worth buying" launches "AI purchase advice" on the high-priced goods page to help users make purchase decisions more accurately and efficiently. Comprehensively upgrade MGC to AIGC, complete content can be generated through commodity keywords, and content production efficiency can be improved. 2) in terms of community governance, "what's worth buying" uses AI for community governance and content quality control; currently, the company has tested the "AI comment Robot" product within the comment area.

3) in terms of product innovation, "what is worth buying" is actively developing "private shopping assistants" based on the big model of worth buying consumer content.

Profit forecast and investment rating: the company takes consumer content as the core, and the technical strength, data and content richness of the platform are important competitive elements; AI enabling content generation efficiency is expected to significantly increase content production capacity and attract and operate more users. Considering that the recovery of the company's business in the first three quarters of 2023 was slightly lower than we expected, we adjusted our 2023-2025 net profit from 140 million to 140 million, we are still optimistic about the increase in content production capacity and conversion rate under the company's AI support, and maintain the "buy" rating.

Risk hint: new business development is not as expected, market competition risk, AI technology and application development is not as expected.