Performance Overview: In 2023, the company achieved revenue of HK$2.0 billion, YoY +38.7%. By business, the company's subscription revenue in 2023 was HK$870 million, YoY +58.2%, accounting for 43.4% of total revenue; value-added revenue of HK$1.13 billion, YoY +26.7%, accounting for 56.6% of total revenue. In 2023, the company's adjusted EBITDA was HK$320 million, YoY +6.6%, and the adjusted EBITDA rate reached 16.0%; the company's net profit in 2023 was -210,000 HKD, mainly due to the company's expansion of business and sales and R&D expenses.

The subscription business technology is upgraded, and value-added business is actively innovating. 1) Subscription service: service technology upgrade+service field expansion. In 2023, the company carried out a number of technical service upgrades and product development. The company's intelligent data service tools can perform more granular risk rating assessments on infringing websites, assist customers in decision-making more frequently, and provide corresponding solutions. At the same time, the company extended its service capabilities to a wider range of copyright fields. In 2023, the company expanded new customers in the fields of trademarks, literary works, commercial images, etc., and provided intellectual property services for top international competitions, and also developed other commercial monitoring fields such as licensed product protection and hidden sponsor marketing; 2) Value-added services: contract upgrade+active innovation. The company maintained the trend of contract upgrades with large content parties, achieved larger coverage of leading content, and increased content management penetration rate for major customers. At the same time, in response to increased customer attention in digital asset fields such as Web3, the company uses its R&D capabilities to build industry-level copyright protection and transaction infrastructure for enterprise platforms and provide high-quality innovative business support.

Domestic revenue continued to grow, and the North American market performed steadily. By region, 1) Domestic business: Domestic business revenue in 2023 was HK$1.0 billion, YoY +42.9%, accounting for 50.1% of total revenue, an increase of 1.7 pct over the previous year. The company accelerates the implementation of copyright protection and monetization business models in China. In 2023, the company helped major domestic content players promote international content monetization. At the same time, the company used the API model to expand coverage for small and medium-sized creators and helped build a new IP literature trading platform. On the other hand, the company actively participated in the construction of a data element management platform and applied authorization technology to the digital governance of the Chinese video industry; 2) Overseas business: In 2023, revenue in North America was HK$980 million, YoY +32.4%, accounting for 49.1% of total revenue, a year-on-year decrease of 2.2 pct. The number of North American customers and the number of active social media assets managed by the company continued to grow in 2023. At the same time, the company has enhanced its ability to monitor live streaming content infringement on social platforms, strengthened the coverage of content management for major international brand customers, and continued to receive orders in the field of music copyright.

Seize AI opportunities and promote the implementation of new commercial services for copyright content. Facing the changes in the industry caused by AI, the company has forward-looking technical reserves and layout, and its R&D and operation center in Florida, USA has been put into operation. The R&D center will consolidate the company's technological advantages and refine the company's ability to provide infrastructure in the AIGC era. Furthermore, the company is exploring copyright service solutions for small and medium-sized content parties to promote the integration of AIGC and Web3 service capabilities to open up new growth space.

Profit forecast: The company continues to upgrade products and technology, expand service areas from multiple angles, and actively seize new industry opportunities brought about by AIGC. Based on the 2023 performance, we have adjusted the company's performance forecast appropriately. It is estimated that Fubo Group will achieve revenue of HK$25.10/33.80/HK$4,190 billion in 2024-2026, respectively, corresponding to PS 1.6/1.2/0.9x, and maintain a “buy” rating.

Risk warning: Domestic business growth falls short of expectations, and market competition intensifies.