Incident: In 2023, Jiaoyou Holdings achieved revenue of 1,074 billion yuan, yoy +152.42%; net profit to mother of 119 million yuan; adjusted net profit of 180 million yuan, a year-on-year increase of 601.3%; total completed commodity transactions (GMV) exceeded 12 billion yuan, yoy +74.1%.
Realize the institutional operation transformation of leading IP live e-commerce, complete the layout of the three platforms Douyin, Taobao, and Jingdong, and successfully create a standardized and replicable matrix-based live broadcast room operation model. The new media service sector (live e-commerce business) achieved rapid growth, with annual revenue of 989 million yuan in '23, yoy +226.84%, accounting for 92.03% of total revenue. The company continues to promote large-scale construction of vertical matrix live broadcast rooms and deepen the industrial belt layout. Currently, the company has more than 30 live broadcast room matrices, with a total number of fans exceeding 50 million. At the same time, it is gradually building a “friend cloud” platform to automate the entire live e-commerce link process. According to the company's latest announcement, 2024Q1 completed a total GMV of about 2,432 billion yuan, an increase of about 25% over the previous year.
“Make a friend” channel brand building, segment mature categories, and expand the demand layout of the industrial belt. Through live streaming, the company helps brands achieve cross-private domain traffic while attracting public domain user traffic, creating brand recognition effects while providing consumers with higher quality and lower cost products. Currently, the live e-commerce industry has entered a stage of steady growth. According to iResearch, China's live streaming e-commerce market reached 4.9 trillion yuan in 2023, yoy +35.2%. The core live e-commerce service provider is one of the important “connectors” between supply and demand, and is accelerating digital transformation to meet market demand. Jiaotou Holdings also starts from the core value of long-term principles. In the future, it will explore industrial belts with local specialty products and carry out industrial belt layout to meet the consumer positioning needs of different groups of people.
Investment advice: Get a friend to hold a new retail company driven by technology, using live streaming as a tool, experience as the core, and efficiency as the support to build a channel brand trusted by consumers and merchants. The company's revenue for 24/25/26 is expected to reach 1,443/19.62/2.30 billion yuan, and net profit to mother will reach 1.96/2.97/361 million yuan, yoy +64.1%/51.4%/21.5%, respectively. I am optimistic that the penetration rate of the company's future products and customer base will increase sustainability and maintain the “buy” rating
Risk warning: industry competition intensifies; business development falls short of expectations; consumer demand falls short of expectations; policy regulation risks.