After being halted for more than two months, wanka online (01762) resumed trading and saw a surge.
On the evening of June 7th, wanka online, which had been suspended since April 2nd, finally issued its "late" 2023 annual results, and announced that it would resume trading on June 11th. According to the company's financial report, in 2023 wanka online achieved revenue of 2.098 billion yuan (RMB, the same below), although revenue decreased by 8.8% year-on-year, the company's net profit attributable to shareholders in the same period reached 17.636 million yuan, successfully reversing losses into profits.
During the period when wanka online was suspended, the Hang Seng Index experienced a wave of rebound trends, rising from a high of 16,541.42 points to 19,706.12 points, with a maximum increase of nearly 20%; during the same period, the Hang Seng Tech Index rose from a high of 3,477.55 points to 4,162.51 points, with a maximum increase of almost 20%.
Perhaps due to the strong trend of the stock market and the impact of the company's reversal of losses into profits, wanka online opened high and rose after resuming trading on June 11th, with the maximum increase exceeding 170% at one point. At the close of the day, wanka online reported a price of HK$0.162, an increase of 105.06%. However, it is worth noting that even after experiencing a surge, wanka online's cumulative increase for this year is only 1.25%, just barely "getting back to normal". Moreover, in a longer time period, the market capitalization of wanka online is only a fraction of its historical high in 2019.
The 'late' financial report brings mixed joy and sorrow.
According to public information, wanka online mainly provides comprehensive Android ecosystem services such as mobile promotion, content distribution, and game research and operation to smartphone manufacturers, advertisers, and content developers. Currently, the company's business covers all mainstream smartphone operating system ecologies.
Looking back at wanka online's journey in the capital market, its 'highlight moment' still remains in its initial listing in 2018-2019. At that time, wanka online, which had gathered many hot concepts such as the Internet, games, and 5G, was favored by the market's hot money, and its stock price once rose more than 60% from the issue price. However, since then, with the industry entering a downturn cycle, wanka online's performance and stock price have both entered a long-term downward trend.
According to the company's latest financial report, wanka online's revenue and net profit attributable to shareholders in 2023 were 2.098 billion yuan and 15.488 million yuan, respectively. Looking at the income structure breakdown, the income brought by wanka online's various business lines in this year basically showed a downward trend. Specifically, the mobile advertising service, which accounts for the largest share of the revenue, contributed 1.998 billion yuan, accounting for 95.2%, and the scale decreased by 9.1% year-on-year. During the same period, the revenue of network video product distribution services and game operation services were 56.583 million yuan and 4.314 million yuan, respectively, and both showed varying degrees of decline.
On a year-on-year basis, although the company's revenue decreased by 8.8% compared to the previous year, its net profit attributable to shareholders successfully reversed losses into profits, with a loss of -130 million yuan in the same period last year. According to observations from the Zhitongcaijing APP, the reason why wanka online's profit data could rise against the trend in the case of negative income growth is related to the convergence of the company's goodwill impairment losses. The financial report shows that the company's goodwill impairment scale was 2.361 million yuan during the period, a significant decrease from 155 million yuan in the same period last year.
Although wanka online achieved a profit after reversing losses into profits, the company's real profit-making ability did not improve significantly when comprehensive data was taken into consideration. The financial report shows that the company's gross profit in 2023 was 223 million yuan, a decrease of 4.8% year-on-year. Thanks to the decrease in amortization expenses related to intangible assets acquired by the company, and the increase in gross profit contributed by software maintenance services, wanka online's comprehensive gross margin increased by 0.4 percentage points to 10.6% year-on-year, and the profit-making ability was basically the same as the same period last year.
Overall, wanka online's revenue growth has stagnated, and for a company with a capped scale, whether its profit performance can 'double down' is expected to be a major challenge.
Is the market space "demystified" and urgently needs a new story?
In the years when the Internet industry was rapidly advancing, the mobile Internet was once seen as the 'new land' of gold everywhere. However, with changes in internal and external environments in recent years, even major companies still need to shrink to cope with the new normal, and the 'middlemen' in the industry can only survive in the cracks.
Taking Wanka Online for example, as previously mentioned, the company's revenue still mainly relies on mobile advertising business. According to the company's financial report, Wanka's mobile advertising services mainly generate revenue by distributing mobile applications and mobile game advertisements for industry customers through distribution channels of core alliance members, non-core alliance smartphone manufacturers, and non-smartphone manufacturers. Among them, mobile game distribution is the key to Wanka's revenue. In 2023, the revenue generated by this business alone reached 1.977 billion yuan, which shows its crucial impact on the overall performance of the company.
Unfortunately, if viewed from the perspective of the entire industry, China's mobile advertising market has long entered the stock phase from the incremental phase. According to the data from iMedia Research, the scale of China's mobile advertising market in 2023 is about 464.66 billion yuan, with a year-on-year growth rate of only 2.7%. According to the organization's forecast, with the gradual weakening of the traffic dividend, mobile advertising has ended the era of traffic competition, and the overall industry has entered a stable development period. In the future, the industry's scale growth rate will tend to be stable as it steps into the phase of policy strengthening and content competition as the main focus.
Against the backdrop of a lack of imagination in the industry space, Wanka Online may urgently need new stories to impress secondary market investors. In the latest financial report released by the company, Wanka stated that its affiliated companies have cooperated with many well-known auto manufacturers such as Changan, Great Wall, Lantu, FAW Pentium, covering more than 90 applications. In the future, based on its experience in the vehicle networking field, Wanka Online will intensify its exploration of diverse new application scenarios on different intelligent devices to meet different needs of various industries in the mobile internet.
Finally, returning to the perspective of the capital market, Wanka Online's stock price doubled on the first day of resumption of trading. However, even so, the company's increase in the year has barely returned to normal. For Wanka Online, the company may need to 'race against time' and cultivate new growth drivers as soon as possible in order to attract long-term funds in the market.