Event: The company announced its annual report for the year 2010. In 2023, the company achieved revenue of 4.202 billion yuan, +1.77% year-on-year, net profit to mother of 93 million yuan, or -48.43% year-on-year, net profit of non-return to mother of 74 million yuan, or -28.96% year-on-year. 2023Q4, the company achieved revenue of 1,032 billion yuan, +0.95% year-on-year, net profit to mother of -20 million yuan, a year-on-year narrowing of 17.58%, and net profit after deducting non-attributable net profit of -0.19 billion yuan, a year-on-year narrowing of 59.27%.
The main marketing business of 2023Q4 celebrities remains steady and actively optimizes cost investment. In 2023, the company strengthened cooperation with brand customers and optimized the customer structure. The 2023Q4 celebrity marketing business achieved revenue of 1,032 billion yuan, YoY +0.95%, and continued to stabilize its leading position. The 2023Q4 gross profit margin was 16.64%, -5.42pct year over year, mainly affected by many factors such as fluctuations in the market and economic environment. In terms of costs, the company actively optimizes cost investment. The 2023Q4 sales/management/ R&D/ cost rates were 5.50%/5.85%/2.58%/0.13%, respectively, -2.21pct/+1.82pct/-1.84pct. On the profit side, 2023Q4's performance was under pressure, mainly accruing credit impairment losses of 72.27 million yuan.
WEIQ has continued to grow in dual-end user registrations and launched Adream, a SaaS platform for overseas influencer marketing. As of 2023, the number of registered fans on the WEIQ World Show Marketing Platform has reached 2,935 million, the number of registered MCN organizations exceeds 17,000, and the number of registered merchants is nearly 200,000. The number of double-end users continues to grow, achieving links and celebrity coverage for most active MCN organizations. WEIQ continues to iteratively optimize, improve the commercialization efficiency of celebrities through data products and technical tools, and help celebrities to better realize commercial value. At the same time, through a complete self-service transaction process and guarantee mechanism, more content creators were attracted to access the platform and become professional celebrities. The number of professional winners increased by 432,000 in 2023, with tail influencers accounting for 33.3% of revenue (YOY+5.9pcts), and waist celebrities accounting for 85.8%, showing a trend of decentralization. In terms of overseas marketing, the company launched an overseas celebrity marketing SaaS product, aDream, to provide overseas brands and MCN organizations with various services such as building independent celebrity marketing websites and e-commerce CRM management systems, further consolidating the company's leading position in the celebrity marketing field.
Actively deploy new technologies such as artificial intelligence, and improve the layout of the celebrity ecosystem. For clients, after a year of iterative upgrades, the Honguniverse platform has formed a standardized metaverse scene service system, providing rich virtual scene services in various fields such as digital cultural tourism, digital marketing, and digital performances, and successfully achieved commercialization breakthroughs. Facing the celebrity side, “Inspiration Island” gives full play to the advantages of the company's social marketing Chinese corpus and provides 30+ functional modules, covering all creative scenarios. It has helped hundreds of thousands of content creators complete nearly 10 million pieces of content in 2023. At the same time, AI technology is also being applied by the company to data services, content services, etc., to continuously improve the layout of the celebrity ecosystem.
Investment advice: We expect the company to achieve net profit of 1.92/2.272/314 million yuan in 2024-2026, +106.71%/+41.98%/+15.17% year-on-year, corresponding PE of 39.59X/27.88X/24.21X, maintaining a “buy” rating.
Risk warning: Downside risks in the macro environment, progress in new technologies falling short of expectations, intensifying market competition