Introduction to this report:
The company's revenue side slightly exceeded expectations and the profit side was slightly lower than expected during the reporting period. In the later stages, on the one hand, it focused on a new round of incentives, and on the other hand, the development of new models and overseas operations.
Summary:
Maintain an increase in holdings rating. Considering the increase in compensation costs and the impact of the divestment of the education business brought about by the optimization of the company's short-term incentive mechanism, FY2024-26 non-GAAP adjusted net profit to mother was lowered to 9.96 (-9%) /10.93 (-19%) /12.91 (-18%) billion yuan to maintain the shareholding increase rating.
Performance summary: The company's FY2024H1 achieved revenue of 2,795 million yuan/ +34.4%, including self-operated products and live streaming e-commerce of 2,411 million yuan/ +36.6%, university education 366 million yuan/ +23.9%, institutional business 18 million yuan/ -6.2%, gross profit of 1,094 million yuan, gross profit of 39.14% /-8pct, of which the gross profit margin for proprietary products and live e-commerce business was -9.53%, net profit to mother of 249 million yuan/ -74%, margin of 8.9%, year-on-year, -19pct. Non-GAAP net profit of 509 million yuan/ -15.4%, margin was 18.2%, -10.7pct year over year, and -1.9pct month-on-month.
The revenue side slightly exceeded expectations, and the profit side was slightly lower. ① GMV of 5.7 billion yuan is basically in line with expectations. Since July 2023, Taobao Live streaming has increased and independent apps have boosted revenue growth. Among them, the revenue side slightly exceeded expectations due to the increase in the unit price and share of self-employed customers. Furthermore, since October 2023, rolling GMV due to increased discounts has continued to rise. Combined with “Walking with Hui” in the early stages of growth, it is expected that the subsequent revenue side will still be supported; ② The gross margin of the live e-commerce business declined sequentially, affected by increased concessions and subsidies brought about by the promotion of the membership system; ③ 2022H1 was in the early stages of selection development, Salaries have not been raised yet and capital expenses are low, so the profit side has declined year on year. We need to keep an eye on the continuity of incentives for core anchors, including the pace and volume of a new round of equity incentives, as well as the rationalization of organizational mechanisms and the stabilization of organizational potential, which are prerequisites for the company to achieve two-wheel drive for traffic+products.
The company's positioning is still being explored and requires continued attention to marginal catalysis. ① The market is very divided on the company's positioning as an MCN, retail, and product company. At this stage, the model is still uncertain. Organizational capacity and supply chain stability are gradually being consolidated and explored, and brand power is still being built; ② “Walking with Hui” and Oriental Cultural Tourism are both exploring new models. The group level provides ground support and staffing, and the selection mainly plays a role as a sales channel. Compared with the relationship between content supply and government and enterprise, the monetization capacity is more worthy of attention; ③ The company opens up overseas team recruitment, including content operation managers, business managers, and TikTok overseas stores Operations and other positions, combined with the anchor's language advantage and TikTok's increased demand for monetization, may become an important catalyst for the next phase of exploring overseas routes.
Risk warning: risk of worsening transaction structure, increased competition, cross-platform cooperation falling short of expectations