SaaS leader in full-link marketing and sales. Established in 2009, Maifushi is the largest marketing and sales software as a service (SaaS) solution provider in China, with a market share of 3.0% in 2023 (up 0.4 pct year over year). Relying on core technologies such as cloud computing, big data, and artificial intelligence, the company has built a Marketingforce platform with about 240 fast functions, covering various key stages of marketing and sales, including content and experience, advertising and promotion, social and relationship, sales and pleasure, data and analysis, and strategy and management to provide various enterprise customers with operating SaaS services and accurate marketing services. In 2021-2023, the company's SaaS business revenue share was 50.0%/46.4%/57.0%, respectively, precision marketing services The revenue share was 50.0%/53.6%/43.0%, respectively.

The share of SaaS revenue continues to rise. In 2024, H1, the company's revenue increased 26.7% year-on-year to reach 0.74 billion yuan. Specifically, it includes

1) SaaS business: Providing SaaS to meet users' needs for marketing and sales activities to obtain revenue in the form of subscription fees. 2024H1 accounted for 54.1% of revenue and 88.3% gross margin, leading the industry.

The company's products focus on T-Cloud and Zhenke, which target the marketing process and sales process respectively. The products are mainly aimed at two major customer groups: small and medium enterprises (SMB) and large enterprises (KA).

2) Precision marketing services: The business mainly helps B2C enterprise customers increase online exposure and brand awareness through cooperative purchase promotion with high-traffic media platforms. 24H1, revenue from precision marketing services accounted for 45.9% of total revenue. Revenue increased 22.6% year over year to 0.34 billion yuan, and gross margin was 11.7%.

Full link, full scenario, one-stop, with T-Cloud and Zhenke as core products to provide customers with marketing and sales solutions. 1) T Cloud: The product targets SME users. As the company's first growth curve, it focuses on solving the customer acquisition challenges of mid-level B2B companies. Using AI to generate online marketing platforms and content, T Cloud can intelligently match publishing channels and gather business leads to effectively improve marketing conversion rates. Since its launch in 2015, the average customer unit price has been around 0.03 million yuan. 2) Zhenke: The product is targeted at large enterprise customers, launched in 2021, and focuses on the refined management of existing customer assets. Using an intelligent AI-driven marketing center, Zhenke automates marketing and performs personalized maintenance for existing customers. KA's business is industry-based, focusing on consumer retail, automobiles, healthcare, finance and manufacturing, etc., to promote the enterprise to achieve accurate customer operation. The median contract value customer unit price is about 0.5 million yuan. T Cloud accounts for a relatively low proportion of users in the overall market and has great potential for development. Due to its late launch, Zhenke is currently in a stage of rapid growth, and it is expected that it will continue to maintain a strong growth trend in the future. Also, as the company continues to develop new modules, it will attract more potential users to subscribe to the product.

China's marketing and sales SaaS market is expected to reach a CAGR of 29% in 22-27 years. The marketing and sales market has huge potential customers. According to Frost & Sullivan data, the total number of Chinese companies reached 56.9 million in 2023, and is expected to increase to 74.8 million in 2028. In terms of revenue, the marketing and sales SaaS market achieved a compound annual growth rate of 29.7% during 2017-2022, and the market size reached 20.6 billion yuan. The market is expected to continue to grow strongly during the period from 2022 to 2027. The compound annual growth rate is expected to be 29.3%, and the market size is expected to reach 74.5 billion yuan. Despite the company's leading position in the industry, its share in the Chinese sales and marketing SaaS market is relatively low, accounting for 2.6% in 2022, while the second and third place market shares were 2.1% and 1.9%, respectively. Currently, the industry is in a stage of high growth and high fragmentation, and the company still has significant growth potential and room for market expansion in this rapidly expanding market.

The company's SaaS business revenue continues to grow rapidly, and the number of users continues to expand. From 2021 to 2023, the company's SaaS business revenue was 0.44 billion yuan, 0.53 billion yuan, and 700 million yuan, respectively, with a compound annual growth rate of 26.5%. In the first half of 2024, the company's SaaS business revenue increased by 30.4% year-on-year to 0.4 billion yuan, mainly due to the company's continued deepening of core business areas. Judging from the specific data, the total number of H1 company users increased 13.1% year on year to 22,247 in 2024, while the average monthly revenue of users increased 16.5% year on year to reach 3,621 yuan. The company's remarkable results in user growth and unit user value increase have laid the foundation for future performance growth.

Launched a large model in the Tforce marketing field, and open source attributes helped countercyclical growth. As a leading domestic SaaS company, the company launched the Tforce big model in '24, combining AI with the company's products, integrating it into the product function portfolio using massive data accumulated in the past, and empowering customers to achieve six major functions, including content generation, strategy generation, intelligent shopping guide, and accurate delivery. Improve customer acquisition and operational efficiency and effectiveness, and automate marketing and sales growth. Furthermore, even in a weak economic recovery cycle, although most companies control the digital budget, marketing and sales have open source attributes, and enterprises still maintain strong investment in open source efficiency. Therefore, the marketing and sales SaaS business has countercyclical characteristics and is expected to grow in the current complex economic environment. Furthermore, benefiting from the domestic substitution trend and the competitive advantage of Xinchuang qualifications, the company has huge room for development in the replacement market, and future growth is worth paying attention to.

Profit forecasting and valuation analysis. We expect the company's revenue in 2024-2026 to be 1.476/1.935/2.549 billion yuan respectively, up 19.8%/31.1%/31.7% year-on-year. The current stock price corresponding to 2024-2026 PS is 13.3X/10.1X/7.7X, respectively. Considering the rapid growth in the company's KA+SMB two-wheel drive performance, it was the first time it was covered with a “recommended” rating.

Risk warning. Business development fell short of expectations, market competition intensified, and cost optimization fell short of expectations.