2024Q3 revenue grew, losses narrowed year on year, and we are optimistic that performance will continue to recover. Maintaining a “buy” rating of 2024Q3, the company's revenue was 0.296 billion yuan (+5.19% year over year), net loss to mother was 3.853 million yuan (72.68% year over year), Q1-Q3 revenue in 2024 was 1.012 billion yuan (+5.54% year over year), and net profit to mother was 3.805 million yuan (-72.94% year on year). 2024Q3 gross margin was 44.21% (+1.4pct year over year), sales expenses were 47.752 million yuan (YoY -15%), management expenses were 44.755 million yuan (YoY +0.74%), R&D expenses were 40.422 million yuan (YoY +3.92%), and net margin was -0.9% (+4.3pct YoY). Based on AI, overseas business investment, and “double 11" or helping to repair performance, we maintain the 2024-2026 profit forecast, and predict that the company's net profit to mother in 2024-2026 will be 0.091/0.127/0.182 billion yuan, respectively, the corresponding EPS will be 0.46/0.64/0.92 yuan, respectively. The PE corresponding to the current stock price is 67.3/48.3/33.6 times, respectively, to maintain a “buy” rating.

“What is worth buying” apps continue to iterate, and “Double 11" superimposes “trade-in” or drives traffic growth on the product side. The 2024Q3 “What is worth buying GEN2” has entered the closed beta stage and is gradually being scaled up based on closed beta data and user feedback. The company may cooperate with more external partners in the future to jointly build an “AI+ interest” two-wheel drive consumer ecosystem. According to Tmall, on the first day of the “Double 11" pre-sale in 2024, sales of major Tmall appliances increased 765% year-on-year. 2024Q4 ushered in the “Double 11" with the earliest, longest cycle, and the most open “Double 11", which was combined with trade-in subsidies, or continued to drive sales growth in categories such as home appliances and digital 3C. 3C and home appliances are key categories of the “what is worth buying” platform. “Double 11” may help the platform's traffic ecosystem prosper and drive advertising revenue growth.

Continuing to promote AI ecosystem co-building, enriching its own product matrix, and steadily advancing the AI aspect of overseas business, the company is positioned as a “big model consumer information provider” and has reached cooperation with major models and applications such as Kimi, Smart Spectrum Qingyan, iFLY Spark, Conch AI, Kimi, MiniMax, Tencent Yuanbao, and Huawei Hongmeng to advance comprehensively in the fields of AI industry co-creation, technological innovation, and marketing ecology. In terms of its own AI products, the company has built its own AI product matrix including “1 big consumption model, 2 databases, 3 engines, and 4 types of applications”, and continues to promote AI to enable business efficiency. In terms of overseas business, the three wholly-owned overseas subsidiaries/subsidiary companies established by the company's wholly-owned subsidiary “Hainan Numerical Technology Co., Ltd.” in the first half of 2024 completed ODI (Foreign Direct Investment) filings in September, and “AI+ Overseas” is expected to drive long-term growth.

Risk warning: the risk of e-commerce policy changes, innovative business development falling short of expectations, etc.