The Zhitong Finance App learned that Dongwu Securities released a research report stating that it maintains the “buy” rating of Fubo Group (03738). The company's revenue in 2023 increased 39% year over year to HK$2 billion. Gross profit increased 44% year over year to HK$850 million, and gross margin increased 1.5 pct to 42.5% year over year, thanks to improved cost control capabilities and operational efficiency. Sales and marketing expenses/ R&D expenses/ administrative expenses increased by 87%/74%/25% year-on-year to HK$2.8/23/200 million respectively in 2023.

The main views of Dongwu Securities are as follows:

By business:

In 2023, subscription service revenue increased 58% year-on-year to HK$870 million, accounting for 43% of the revenue. The subscription service product matrix continued to be improved. A number of technical services were further upgraded, service capabilities extended to a wider range of copyright fields, expanded new customers in the fields of trademarks, literary works, commercial images, etc., and provided intellectual property services for top international events. In addition to traditional live streaming on demand, it also pioneered other commercial monitoring fields such as licensed product protection and hidden sponsor marketing. It is expected that as global awareness of copyright protection continues to rise, customer coverage continues to expand, and copyright holders' willingness to pay continues to increase, the company's subscription service will continue to maintain strong certainty.

Revenue from value-added services increased 27% year over year in 2023 to HK$1.13 billion, accounting for 57% of revenue. The company's contracts with major international customers have continued to be upgraded, and the content management penetration rate has increased dramatically; in the Chinese market, it has completed participation in various projects and ongoing construction, and has established continuous cooperation with many major Chinese content parties and continuously expanded the scope of services.

By region:

In 2023, US market revenue increased 33% year over year to HK$980 million, accounting for 49% of revenue. Cooperation with global content providers is stable, the exclusivity of content on streaming platforms is guaranteed, and YouTube's exposure and monetization capabilities have increased.

In 2023, China's market revenue increased 44% year-on-year to HK$1 billion, accounting for 50% of revenue. It continues to expand in commercialization fields such as international events, licensed product protection, and hidden sponsor marketing, and is progressing smoothly in innovative business areas such as digital cultural trade and platform technology services.

Actively lay out the field of AI:

The company actively lays out the AI field and cooperates with the University of Florida and other institutions to develop digital content copyright technology to cope with changes in the content production and distribution pattern. The company actively develops new products to adapt to changes in market demand, especially in the field of digital assets such as Web3, to build industry-level copyright protection and transaction infrastructure for the required enterprise platforms.