Revenue continued to recover, reducing costs and efficiency boosted net profit by 43% in the third quarter. 1) the company's income in the first three quarters was 3.17 billion yuan, up 2.0% from the same period last year; the company's net profit was 110 million yuan, down 44.8% from the same period last year. 2) the company's revenue in the third quarter was 1.06 billion yuan, up 4.2% from the same period last year, mainly due to the fact that the main business WEIQ stabilized against the trend and the new business continued to improve; the net profit at home was 50 million yuan, up 42.8% from the same period last year, mainly due to the promotion of reducing costs and increasing efficiency.

In the third quarter, the gross profit margin fell slightly by 3 percentage points, and the overall expense rate fell by 4.7 percentage points. The company's gross profit margin in the first three quarters was 18.5%, down 3.2% from the same period last year, of which the gross profit margin in the third quarter was 16.9%, down 3.1% from the same period last year, mainly due to increased media procurement costs and changes in customer structure. In terms of expenses, the overall expense rate in the first three quarters was 13.5%, down 3.0% from the same period last year, mainly due to the promotion of cost reduction and efficiency; the downward trend of expense rate in the third quarter continued, with sales / management / finance / R & D expense rates of 5.3%, 4.6%, 0.1% and 2.1%, respectively, compared with the same period last year.

The main WEIQ platform stabilized against the trend, and the new business expanded the advantage of the industrial chain of the red man economy. 1) in terms of the main celebrity marketing platform, both active customers and the number of celebrities have increased greatly, and the registration of dual-end users (celebrities and merchants) of the platform has continued to grow in the first three quarters, providing digital empowerment for more creators and brand merchants. 2) in terms of new business, the company has expanded digital products such as WEIQ-SAAS and heat wave data, as well as commercial services such as IMSOCIAL Accelerator (providing accelerated growth services for celebrities and MCN institutions) and TOPKLOUT Crawley (China's leading authoritative self-media value ranking and third-party data testing institutions managed by copyright brokers). And popular vocational education (popular vocational education brand "World Show Education"), trend content block West Fifth Street (App for generation Z) and so on. In the third quarter, the cultural and creative brand alliance chain provided by Tianxiu Star Mine Technology has become the basic chain at the bottom of the asset registration platform of Beijing International big data Exchange; TopHolder has become the digital key distribution platform for Fantsey Music Universe. In September, Jewell Music and thin Box APP jointly created, joined hands with the number one collector of digital Tibetan platform TopHolder, and launched the new "Fantasy Music Universe" in Weibo Corp.

Risk tips: innovative business has a long recovery cycle; customers depress gross profit margin; new media marketing market competition is fierce.

Investment advice: the company's main business stabilizes against the trend, continues to expand its advantages in the red industry chain, and maintains a "holding" rating. We maintain the profit forecast and estimate that the net profit from 2023 to 2025 will be 1.9 EPS=0.1/0.15/0.17 2.7 / 320 million yuan respectively, a year-on-year growth rate of 4.2%, 43.2% and 17.7%, respectively. The current share price corresponds to PE=56.9x/39.7x/33.7x. The company takes the lead in the layout of the celebrity economy, accumulates deep and scarce resources in customers and celebrities, and maintains an "overweight" rating.