The company released its 23 annual report and 24 quarterly report. The balance and liability structure was further optimized, operating cash flow improved markedly, and cash dividends continued to grow steadily. At the same time, the company also launched multi-modal AI products to help reduce costs and increase efficiency through AI.

The company released 23 annual reports, achieving revenue of 5.284 billion yuan, a year-on-year decrease of 6.54%; net profit attributable to mother of 528 million yuan, a year-on-year decrease of 28.36%; net profit after deducting non-attributable net profit of 408 million yuan, a year-on-year decrease of 18.76%; and net operating cash flow of 128 million yuan.

Dividend plan: The company plans to distribute a cash dividend of 1.70 yuan per share (tax included) to all shareholders, with a total cash dividend of 251 million yuan for the year 23; at the same time, it plans to transfer 0.45 shares per share to all shareholders using the share capital premium from the capital reserve. It is estimated that the amount of cash dividends in fiscal year 23 will account for 47.58% of the net profit attributable to the mother.

The company released the 24Q1 quarterly report, achieving revenue of 936 million yuan, a year-on-year increase of 0.60%; net profit to mother of 49 million yuan, a year-on-year decrease of 65.53%; net profit after deducting non-return to mother of 48 million yuan, a year-on-year decrease of 42.31%; and net operating cash flow of -277 million yuan.

Optimize the balance and liability structure and insist on stable dividends. In 23 years, the company strictly controlled risk business, strengthened business repayment management, and continued to improve cash flow. Accounts receivable at the end of 2023 decreased by 701 million yuan compared to the beginning of the year, down 22.74% year on year; the company's financial situation improved steadily, and the balance ratio fell from 51.06% at the beginning of the year to 40.39% at the end of the year. In addition, the company has formulated a 24-26 dividend plan. In principle, the annual cash dividend is not less than 35% of net profit deducted from non-mother's return for the year.

Entered the sports lottery business. The trio reached a strategic cooperation with Hesheng Creative Development Group Co., Ltd. to operate the sports lottery and welfare lottery sales business of Beijing Chaoji Hesheng Hui as a holding subsidiary. In the future, through brand marketing and promotion advantages and customer resource advantages, the company will actively expand channels such as commercial complexes and shopping centers, gradually promote the layout of sports lottery outlets, and comprehensively promote the sports lottery business through “IP co-branding”.

Actively explore AI and launch multi-modal AI products in the marketing field. Within 23 years, the company launched a multi-modal AI product in the marketing field: “One” AI, which aims to intelligently provide advertisers with full-process marketing services including early marketing strategies, mid-term creative output, and late-stage intelligent delivery. The company has formed a rich case experience base for customers in different industries. Based on 20 years of massive data and experience, the company provides professional marketing services to small and medium-sized advertisers through AI technology.

Maintain a “Highly Recommended” investment rating. Considering that the company's performance declined in '23, and earnings from investment activities fluctuated greatly, and there is some uncertainty, we should lower our 24-26 profit forecast. We expect the company's 24-26 revenue to be 58.75/65.09/7.316 billion yuan, respectively, with year-on-year growth rates of 11%/11%/12%, respectively; net profit to mother for 24-26 was 5.80/6.41/709 million yuan respectively, up 10%/11%/11% year-on-year, corresponding to current stock price-earnings ratios of 12.4/ 11.2/10.2 times, maintaining the “Highly Recommended” investment rating.

Risk warning: AI development falls short of expectations, risk of customer loss, uncertainty about company operations, etc.