The blue cursor issued an announcement: In 2023, the company's revenue exceeded 52 billion yuan, with profit due to mother of 1 to 150 million yuan (loss reversal), deducting non-profit of 130 to 180 million yuan (loss); in a single quarter, 2023Q4's profit attributable to mother was -188 to -138 million yuan (narrower than the loss of 2.2 billion yuan in 2022/Q4); at the same time, operating cash flow exceeded 600 million yuan.
Key points of investment
Revenue in 2023 exceeded 52 billion yuan, thanks to net operating cash flow exceeding 600 million yuan from overseas marketing, 2023Q4 came under pressure in a single quarter
For the full year of 2023, the company's revenue exceeded 52 billion yuan and continued to grow. Thanks to overseas marketing help, the net operating cash flow exceeded 600 million yuan. Although the gross margin of overseas marketing was relatively low, the main business revenue and profitability highlighted demand resilience. 2023Q4's profit loss to mother (loss narrowed compared to the previous year), and was implemented in stages under pressure.
Upgrade from All in AI to AI First in 2024
The company continues to focus on its main business layout, and the exploration of new supply continues. In September 2023, the company launched the marketing industry model “Blue AI”. In 2024, Blue AI will continue to evolve into an AI Agent (smart body) based on existing practical applications, and build a Blue AI Studio (smart workshop) to incubate innovative forms of AI applications, become an innovative foundation for AI First, and use AI Native as the core to build processes and drive the business. On the basis of 2024, the company will pursue “AIFirst” on the basis of All in AI. AI-driven businesses are expected to drive high revenue growth (expected to increase from around 100 million yuan in 2023 to more than 10 times AI-driven revenue growth in 2024).
Implement AI, XR, and metaverse applications
Every new technological revolution is expected to drive new developments in the digital marketing industry. Under the development of AI and XR, the company launched a virtual live streaming room and highlighted a full-link solution for the virtual live streaming ecosystem; created the metaverse entertainment festival, and was also the first in China to combine virtual reality experiences using AR, VR, XR and other technologies; at the same time, Dalan BLUEBOX XR Studios empowers virtual shooting; with the support of XR/AI/IP, offline content operation and distribution is expected to boost the company's next city under the dividends of new technology.
Profit forecasting
It is predicted that the company's 2023-2025 revenue will be 520, 567, and 61.3 billion yuan, and EPS will be 0.05, 0.23, and 0.27 yuan respectively, and the current stock price will be 28.1 and 23.2 times PE between 2024 and 2025, respectively. Continued revenue growth is due to economic recovery driving overseas business. Profit loss narrowed and settled in a single quarter, and annual profit turned loss into profit. As a leading digital marketing company, the company continues to iterate on business development and actively implement AI, VR, etc. Technology is used in the main business, which is expected to help repair and add new results to the company, thereby maintaining a “buy” investment rating.
Risk warning
Market competition increases risk; risk of impairment of assets such as accounts receivable and goodwill; competition in marketing and communication industry increases risk; risk of brain loss; risk of innovative business development falling short of expectations; risk of incentive plans falling short of expectations; risk of macroeconomic fluctuations.