Zhewen Internet announced that in 2023, the company's return profit was 175 to 210 million yuan (up 116.56% to 159.87% year on year), and non-profit deducted in 2023 of 1.14 to 149 million yuan (up 63.86% to 114.17% year on year). The non-financial portion mainly involved the company's participation in Doushen Education's restructuring investment, confirming the fair value change income corresponding to the shares held; in a single quarter, 2023Q4's profit to mother was 0.605 to 905.5 million yuan (year-on-year increase of 39% to 120%).
Key points of investment
2023 results end, 2023Q4 profit reverses year-on-year loss in a single quarter, and month-on-month growth highlights the improvement in the main business recovery trend
The company's profit for the first to third quarter of 2023 was 0.38 billion yuan, 0.33, and 0.43 billion yuan (year-on-year increase of +8.4%, +13.56%, and -29%, respectively), deducted non-profit of 0.38, 0.32, and 0.43 billion yuan (year-on-year increases of +5.5%, +12%, and -11%, respectively), and 2023Q4's profit attributable to mother was 0.6 to 0.95 billion yuan (increase 39% to 120% year-on-year, reversing losses). Thanks to the implementation of the media's first state-owned mixed reform in August 2023, the company's capital strength was strengthened, further focused on the field of digital culture, actively placed leading high-quality customers, and continuously improved service quality and operational efficiency, thus achieving steady growth in business performance. In November 2023, Zhejiang Internet Group and CheilWorldwide Gyer Group signed a strategic cooperation agreement. The two sides will combine their resource advantages to jointly provide integrated marketing, strategic ideas, and cross-border e-commerce services for more Chinese brands to go overseas.
Looking inward, the company strengthened cash flow management in 2023. Looking outward, the company completed a fixed increase in 2023. Its fixed capital increase will mainly be invested in technology upgrading or innovative business sectors. The company will continue to strengthen the digital culture sector to help the company move from digital marketing to the smart marketing ecosystem to the advancement of digital culture.
Using AI to save energy is expected to become an important engine for the company's new journey, and the next step in the company's digital culture strategy
The successful completion of the company's fixed increase in August 2023 brought capital replenishment and resource inclination to the company's development on the AI circuit, which will help promote the company's business model innovation, business upgrade and development system transformation. As the main digital culture technology platform under Zhejiang Weninvestment, the company will use AI as a fulcrum to leverage new markets. The company's “AI+ Innovation Business” development path has gradually become clear. It has built an AIGC digital tool matrix with multiple modes of images and scenes, completed the infrastructure for innovative metaverse businesses such as virtual people, virtual spaces, and virtual objects, and increased the layout of segmented tracks such as the automotive metaverse, cultural tourism metaverse, virtual people, AIGC creator community, and live e-commerce to create a second growth curve with AI. Meanwhile, in December 2023, the Zhejiang Internet Hangzhou Intelligent Computing Center was officially put into operation, and the first phase of resource deployment and business implementation began. It will also provide a solid technology development foundation for the development of the digital culture industry and provide high-quality computing power support for the digital development of the cultural industry and AI-enabled application tools.
Profit forecasting
It is predicted that the company's revenue for 2023-2025 will be 107.118.131 billion yuan, and EPS will be 0.13, 0.18, and 0.2 yuan, respectively. The current stock price corresponding to 2024-2025 PE is 25.9 and 22.8 times, respectively. As a leading digital marketing and digital culture enterprise, the company will continue to consolidate its position as the “main platform for digital culture” under Zhejiang Cultural Investment. The company will continue to use the “AI+” model to empower the digital culture industry, thereby maintaining a “buy” investment rating.
Risk warning
Risk of increased market competition, risk of loss of core talent, risk of accounts receivable, risk of impairment of goodwill, risk of loss of goodwill, risk of high concentration of media traffic suppliers, risk of tax policy risk, risk of falling short of expectations in new business, risk of COVID-19 fluctuation, risk of macroeconomic fluctuations.