Report summary:
Incident: On May 10, the 2024 Worth Buying Technology Group Strategy Conference with the theme of “Efficiency Drives the Future” was held. At the conference, Sui Guodong, chairman of Worth Buying, unveiled a comprehensive AI strategy and announced that under the AI strategy framework, the core products will be upgraded to “What is native to AI is worth buying GEN2” while actively promoting overseas plans.
Comment:
The business was fully AI-based, and the AI product matrix was launched. Since 2023, the company has established an independent AI division to independently develop a “big model worth buying”, and has launched various applications in business scenarios. Currently, it has formed a “worth buying technology AI product matrix composed of “1 big model, 2 databases, 3 engines, and 4 types of applications”. Among them, applications include user-oriented AI shopping assistants “small value” and general content understanding tools, “zDM-Copilot Assisted Creation Tool” and “Magic Light Material Assistant” for brands, etc. Production platforms, operations assistants, and more, also include an enhanced toolset for large models. Furthermore, the company is actively strengthening cooperation with big model companies, and has now become one of the first partners of Dark Side of the Moon. “Kimi+ is worth buying” was recently launched.
Deeply transform the core product and launch what is worth buying GEN2. With this product upgrade, what is worth buying GEN2 determines the core of building a content system as “interest”. AI provides low-level capability support for almost all aspects of content production, content collection, content understanding, content generation, and content distribution. While providing decision support to consumers more efficiently, it will also build a more efficient communication bridge between consumers and brands. What is worth buying GEN2 In the content ecosystem where “interest” is the core, AI will support almost all aspects of content production, content collection, content understanding, content generation, and content distribution.
It's worth buying a model to go overseas and explore a new growth curve. In 2023, the company officially proposed an overseas business layout, set up a research and development center for overseas architecture development, initially established an overseas team, and hired a professional agency to design the overseas company structure. In 2024, the company will promote the “worth buying” model through self-operation and cooperation. Currently, Thailand has been selected as the first destination to go overseas, and the Thai version of “What is worth buying” has been named “Zest Buy”. Currently, apps are being launched in various application markets one after another. In addition to the self-operated model, the specific operating models of going overseas include various models such as global partnership programs and joint ventures. Currently, e-commerce in Southeast Asia and other markets is still in a stage of rapid development, and the company is expected to build a new growth curve overseas.
Investment advice: The company is expected to achieve revenue of 1,746/20.03/2,209 billion yuan in 2024-2026, up 20%/15%/10% year on year, and achieve net profit of 1.18/1.68/216 million yuan, up 58%/42%/29% year on year. The corresponding PE is 35x/25x/19x, maintaining a “buy” rating.
Risk warning: policy and regulatory risks, increased risk of industry competition, business progress falling short of expectations