Fubo Group's revenue for the single quarter in 23Q3 increased by 31% year-on-year. Under a comparable scale after completing the acquisition, Fubo Group achieved a high revenue growth rate (23H1 revenue of HK$1.03 billion, +80.3% year-on-year, and realized net profit of HK$29 million, +23.2% year-on-year. The company completed the acquisition of particles on 22H1 and achieved merger), which shows that the company has fully benefited from the trend of legalization as a copyright protection SaaS.
Both upgrading key technologies and expanding new scenarios have maintained high growth at home and abroad
The company maintains a high R&D intensity (23H1 R&D cost rate is 9.5%) and continues to iteratively upgrade key technologies such as digital fingerprint technology and watermark technology to consolidate the company's leading edge in copyright protection. In 2023, the company is actively exploring application opportunities such as data content authorization in the fields of Web 3.0 and AIGC, and is expected to develop new business growth in the AIGC era. By region: After acquiring Particle Technology, the company integrated smoothly and actively expanded into the Chinese market. In 23Q3, the Chinese market revenue increased 33% year over year, and the US market revenue increased 36% year over year. By product: 1) 23H1 subscription service revenue was HK$467 million, up 131.4% year on year; 2) 23H1 value-added service revenue was HK$536 million, up 51.8% year on year.
The expansion of new customers is smooth, and active assets on social platforms are expanding rapidly
23H1, the company's content customers and platform customers were 216 and 137 respectively. The number of active assets on social media platforms exceeded 2.81 million, and the video payment platform managed content for more than 2.3 million hours. The monthly continuous revenue MRR for 23Q3 increased 37% year over year, and the customer retention rate was 99%. In 2023, the company made progress in customer development: 1) API services, deepening cooperation with Douyin and Ant Group, and is expected to expand more content platform customers in the future; 2) The contract with Warner Bros. has been upgraded, and Warner has become one of the company's main customers. 3) Reached a cooperation with Volcano Engine to enhance the product capabilities of its intelligent operation platform and new media management and distribution platform. 4) Strengthen cooperation with radio and television groups in various provinces. In November '23, the company and Fujian Radio and Television jointly released the “Haiyun” excellent cultural video overseas platform. China Digital Culture Group and China Oriental Performing Arts Group have entered the “Haiyun” overseas platform and become the first batch of content partners.
Expanding the copyright protection and global distribution business for short dramas
While the micro-drama market is growing rapidly, regulations are being tightened, and there is a clear trend of boutiquization, and demand for copyright management and rich monetization is increasing. The company is expected to expand its service capabilities to the field of copyright protection and global distribution of short dramas.
Maintaining a buying rating
As a leading copyright SaaS company, the company benefited from the wave of the video DTC and UGC era. The company's customer development was smooth in 23 years, and considering the financial cost impact of the company's acquisition of Particle Technology, we adjusted the company's revenue for 23-24 to HK$20.62/280 billion (the original forecast was $20.21/2,851 billion), adding the 25-year forecast to HK$3,857 billion. We believe that the fundamentals of the company's copyright protection business are stable, and that the gradual implementation of social media monetization and API service businesses is expected to bring incremental contributions. The target PS4x for 23 years (among comparable companies, according to Wind's unanimous forecast, the A-share User Network will correspond to PS5.7x in '23, and the Hong Kong Weimob Group will correspond to PS3.8x in '23), corresponding to the target market value of HK$8.25 billion. Currently, there is still room for 47% growth, maintaining the buying rating.
