Event: It's worth buying to release the 2023&24Q1 financial report. In 2023, we achieved revenue of 1,452 billion/ +18.17%, and net profit of 74.78 million/ -11.92% to mother. 24Q1 achieved revenue of 296 million/ +16.85%, and net profit to mother of 22.71 million (same period last year - 688,000). The abnormal percentage value of net profit due to 24Q1 is mainly due to the fact that the company was in a state of slight loss in the same period last year, and losses increased slightly this year.

Business spin-off: Information promotion revenue of 676 million yuan/ +13.47%, Internet effect marketing platform revenue of 370 million yuan/ -6.86%, operating service fee revenue of 279 million/ +97.45%.

Gross profit and expenses: The increase in the share of proxy operating revenue led to a decline in gross margin, and overall expenses continued to narrow.

2023/24Q1 gross margin was 48.37% (-5.61pcts)/42.28% (-7.15pcts), respectively.

The 2023 sales/management/R&D/finance expense rates were 18.6% (-1.1pcts)/12.5% (+0.3pcts)/11.3% (-0.3pcts)/-0.5% (-0.1pcts), 24Q1 sales/management/R&D/finance expenses were 17.4% (-3.3pcts)/14.4% (-0.5pcts)/14.2% (+1.5pcts)/-0.4% (-0.6pcts), respectively.

GMV and product categories: In 2023, “What's Worth Buying” and corresponding mobile apps confirmed that GMV reached 20.918 billion, up 1.23% year over year, and completed orders of 197 million, up 9.64% year over year. In terms of product categories, digital computers, fresh food, and household appliances are the top categories. As the company's diversified category strategy progresses, the proportion of categories such as home furnishings, maternal and child products, sports and outdoor, personal care and makeup, clothing, shoes and bags continues to rise.

Users: The number of users continues to grow steadily. In 2023, the average monthly activity was 39.2897 million/ +1.02%, the number of registered users was 288.968 million/ +9.5%, and the number of mobile app activations was 71.8085 million/ +11.53%.

AIGC: Based on a third-party generic model and using its own unique data resources and corpus, the company independently developed a big model worth buying and using its own unique data resources and corpus, and launched a series of applications such as “AI Review Bot”, “AI Purchase Suggestions”, and “ZDM-CoPilot Creator Tool” within the “What's Worth Buying” app. In 2023, AIGC's output accounted for 36.66%, an increase of 150.58% year-on-year.

Driven by a 24-year strategy:

① Promote “what is worth buying” core product version upgrades.

② Promote the implementation of AIGC based on the big model of worth buying and spending.

③ Promote a worthwhile model to go overseas and expand the global market.

Dividends: Dividend of 0.14 yuan per share, dividend payment rate of 37.23%.

Profit forecasting and valuation: By providing high-quality consumer content, innovative forms of interaction, and a continuously optimized product operation system, the company provides users with comprehensive, one-stop consumer decision support. The company's core business is steady, and AI application fields are laid out earlier. In the future, with the continuous introduction of AI-related applications, the company model is expected to achieve new growth. The comprehensive forecast for 2024-2025 is a net profit of 102 million/143 million yuan, corresponding to the current 36x/25xPE, maintaining the “recommended” rating.

Risk warning: consumer recovery falls short of expectations, AI application implementation falls short of expectations, overseas business falls short of expectations