Core views:

Easypoint World is the leading global intelligent marketing service provider in China. It is deeply involved in effective advertising and has established a long-term advantage in e-commerce and mobile application customers, and is expected to continue to benefit from the wave of domestic manufacturers going overseas.

In August 2022, the company went public on GEM. The founding team is experienced and the core members are stable. A 23-year restricted equity incentive plan was issued to further bind the core team. The performance assessment target is that the total profit after deducting exchange gains and losses in 23/24 is not less than 2.75 million yuan and 345 million yuan, respectively.

Overseas trends: E-commerce and pan-entertainment companies are speeding up their overseas expansion, and brands going overseas continue to bring advertising demand. Leading B2C e-commerce platforms have accelerated their overseas expansion in recent years, and Pinduoduo TEMU has made great strides in going overseas, intensifying competition in the cross-border e-commerce industry, which is expected to release more marketing investment budgets. Independent stations have also maintained rapid growth in recent years. The promotion of the overseas layout of pan-entertainment companies such as games and skits is also expected to bring about incremental demand.

Easypoint World: Wide channel coverage, increased advertiser richness, and commercialization of AI marketing tools.

It covers a wide range of global media channels, establishes close partnerships with leading media such as Google and Facebook, and expands emerging traffic platforms such as Byte. Advertisers are rich in resources, e-commerce customers have established a basic market, actively expanded diverse industries such as pan-entertainment and new energy, etc., and the richness of the advertiser industry has increased, further consolidating the competitiveness of the main business. The implementation of AI marketing products is expected to gradually contribute to revenue growth.

Profit forecasts and investment advice. We expect the company to achieve revenue of 28.4/3.4 billion yuan in 23-24, a year-on-year increase of 23.3%/19.6%, and net profit of 2.41/301 billion yuan, a year-on-year change of -8.1%/+25.1%. Using the segmented valuation method, considering EasyDianxia as the leading digital marketing company, it is expected to continue to benefit from the wave of domestic cross-border e-commerce and pan-entertainment companies going overseas, giving the main business 35X PE and AI marketing 15X PS for 24 years; the corresponding company has a reasonable total value of 12.791 billion yuan, corresponding to a reasonable value of 27.11 yuan/share, covering for the first time, and giving it a “buy” rating.

Risk warning. Advertiser confidence is low; overseas advertising growth falls short of expectations; new business development falls short of expectations.