Investment highlights:

On December 6, Fubo Group and China Central Radio and Television's subsidiaries signed a “Copyright Protection and Trading Platform” cooperation project with a subsidiary of China Central Radio and Television, which completed cooperation with domestic government customers to continue to promote the development of domestic copyright protection-related business.

The revenue structure is diversified. Domestic and overseas go hand in hand. Judging from the business structure, the company's current business is mainly divided into two segments. One is subscription services, including traditional content protection services, the API platform and subscription revenue sharing based on Particle Technology's original business, and the other is the value-added service business, which includes social media revenue and split revenue from the film and television payment platform after the acquisition of Particle Technology. According to the company announcement, the company's revenue for 2023Q3 was HK$530 million, up 31% year on year, US revenue increased 36% year on year, and revenue in China increased 33% year over year. Both overall and segment growth was maintained at a relatively good level.

Profit forecasts and investment ratings Considering that the company still maintains a good growth trend in customer development, we expect the company's 2023E/2024E/2025E revenue to be 2,05 billion/2.66 billion/HK$3.44 billion respectively, net profit of 0.68 million/185 million/HK$271 million, corresponding to EPS and P/E of HK$0.03/HK$0.08/HK$0.12 and 79.7/29.4/20.1x, respectively. Considering that the company is the leader in domestic copyright protection, it will “increase its holdings” for the first time ratings.

Risks suggest that customer expansion falls short of expectations; exchange risk; particle technology development falls short of expectations; increased market competition; and overseas business risks.