Introduction to this report:

The company is a leading domestic consumer decision-making platform. It has successively expanded performance marketing and overseas business. The AI Wensheng video model is expected to accelerate content transformation and enrich the amount of content on the platform.

Key points of investment:

A leader in consumer decision-making platforms, it was the first to be covered and given a “gain” rating. On the basis of adhering to consumer content as the core, the company thoroughly lays out the three core sectors of consumer content, marketing services, and consumption data, and continuously improves the connection efficiency between the B-side and C-side. Its consumer content community “What's Worth Buying” is expected to expand the richness of content with the help of AI Wensheng's video model. We forecast EPS for 2023-2025 to be 0.36/0.74/1.07 yuan. Referring to comparable company valuations, a target price of 29.67 yuan was given. For the first time, coverage was given an “gain” rating.

AI video is expected to increase the richness of the platform's content. “What is worth buying” is an encyclopedic platform that uses a community mechanism to produce content and structure and organize information to help users achieve efficient consumption decisions in the form of rich content products. The core of these is the quality and richness of content. The company has introduced AI models for text and images, and AI video models such as Sora will be of great help to the platform's content format. On this basis, a closed loop of good content creation and consumption decisions can be formed, increasing the amount of content and GMV generated by the platform.

Deeply cultivate the Douyin e-commerce ecosystem and hope to benefit from the development of the Byte Big Model. The subsidiary Risheng Xingluo provides full-link long-term management services, including marketing planning and live streaming operation, for brands entering Douyin. With the development of Byte's Wenshengtu open model SDXL-Lightning, Douyin e-commerce service providers are expected to use this to improve marketing efficiency and increase the amount of advertising material placed.

The overseas business is expected to be an important margin. The orangutan business in which the company is a shareholder is deeply involved in the Southeast Asian market and has become one of the leading integrated marketing platforms for live streaming in Indonesia. The company's overseas business is expected to have a synergy effect with orangutans and explore new momentum for performance growth.

Risk warning: The development of AI models falls short of expectations, and the expansion of overseas business falls short of expectations.