Core views:
Incident: EasyDianworld released its 24-year semi-annual report. In 24H1, the company achieved revenue of 1.086 billion yuan, an increase of 8.80%; operating profit of 0.11 billion yuan, a decrease of 23.12%; net profit due to mother 0.132 billion yuan, an increase of 10.44%; net profit excluding non-return to mother of 0.125 billion yuan, an increase of 17.83%; net profit attributable to mother excluding exchange gains and losses and share payments of 0.14 billion yuan, an increase of 39.87%. Looking at a single quarter, in 24Q2, the company achieved revenue of 0.605 billion yuan, an increase of 15.23%, and a month-on-month increase of 25.77%; net profit to mother of 0.082 billion yuan, up 4.73% from the same period, up 63.28% month-on-month; net profit without return to mother of 0.079 billion yuan, an increase of 13.10%, or 67.64% month-on-month; net profit attributable to mother excluding exchange gains and losses and share payments was 0.076 billion yuan, an increase of 40.84%. The difference between the company's operating profit and net profit due to the Hong Kong company's offshore exemption in the first half of the year was mainly due to income tax reversals caused by offshore exemptions for Hong Kong companies. 24H1 income tax reversals contributed 0.02 billion yuan to profit formation (23H1 income tax expenses were 0.025 billion yuan).
By advertiser: 24H1, e-commerce advertisers contributed 0.269 billion yuan in revenue, up 10.32% year on year, accounting for 24.79% of revenue, and gross margin rebounded to 34.47% (26.53% in '23); revenue from apps, entertainment agencies, and others contributed 0.813 billion yuan, up 8.04% year on year, with a gross profit margin of 16.72% (23.62% in '23).
According to the company's financial report, KreadoAI has covered 203 countries around the world, with 100w+ registered users and over 1 million monthly user visits. In June, the content generation algorithm independently developed by KreadOAI successfully passed the National Internet Information Office's registration. According to the company's official account, the company helps customers such as Voice, Music, and Tencent Video (WeTV) accelerate penetration into overseas markets.
Profit forecasting and investment advice. We expect the company's 24-25 revenue of 2.357/2.617 billion yuan, and net profit of 0.244/0.27 billion yuan to mother. Using the segmented valuation method, the main business was maintained at 35X PE for 24 years, and the new AI business was 15X PS, corresponding to a reasonable total value of 9.273 billion yuan and a reasonable value of 19.65 yuan/share, maintaining a “buy” rating.
Risk warning. Advertisers' confidence is insufficient; overseas advertising growth falls short of expectations; new business development falls short of expectations.