AI marketing-side applications accelerate development and lay out AI smart marketing matrices. The company actively promotes the innovative practice of AI+ marketing, and has a programmatic advertising application tool, the “Pai Zhi” platform. The “Pai Theater” is an AI multi-modal content sound stage scripting tool module with various functions such as intelligent scripting, intelligent image copywriting design, and intelligent dubbing, which increases copywriting efficiency by 300%, image generation efficiency by 400%, and dubbing time by 1000%; the smart digital human module in the platform can achieve smooth movements and natural facial expressions in videos, while ensuring the accuracy of the digital population type. Currently, it is being built in collaboration with a huge number of engines The AIGC Smart Digital Human Project has completed the production of 65 digital human figures. At the same time, the company has developed an intelligent integrated application product “Curious Shuttle” for corporate marketing and communication scenarios, and has achieved commercial application. Among them, the Wensheng Cultural Product “HOT TOPIC” (Hot Topic) tracks hot topics on the Internet and outputs and generates hot topic articles; the video mixing product “Video Thousand Innovation” is capable of generating diverse short video content between 30 seconds and 120 seconds with one click.

Actively fulfill the main responsibilities of the digital culture industry's main platform. 1) The company holds 9.5% of the shares in the Zhejiang Cultural Exchange. It will give full play to the advantages of digital asset trading licenses, promote the asset operation of cultural data, and achieve a closed loop of value-added throughout the value chain from creation to application, copyright protection, and transaction circulation. 2) The company actively lays out digital cultural computing infrastructure digital services. 24H1 has helped customers such as AI model training to deliver and deploy about 100 intelligent computing servers. 3) Zhejiang Wenmita, a subsidiary of the company, is positioned as a metaverse digital art dreamer, covering TOC creators, and has the AIGC painting tool “Mi Wen”, an auxiliary writing tool for novels and screenplays.

Respond positively to the “National Nine Rules” requirements to increase market value management, and continue to grow bigger and stronger. As of the Q3 report, Hangzhou Bowen, Lin'an Xinjin, and Shanghai Mingde were co-actors, holding a total of 16.46% of the shares. Bowen Investments is the controlling shareholder of the company, and the Zhejiang Provincial Department of Finance is the actual controller of the company. The company actively explores corporate governance structures and mechanisms of state-owned mixed-ownership enterprises, combines the strategic development direction of Zhejiang Cultural Investment Group, consolidates the digital marketing infrastructure business, efficiently promotes the deepening cultivation and practice of digital culture, accelerates the construction of a second curve of company development, explores the commercial potential of digital culture in various fields such as education, games, social networking, etc., and actively promotes a new paradigm of cultural going overseas and promoting the organic integration of the digital culture industry chain.

Profit forecasting and valuation. With the broadening of industry customers and the power of AI, our forecast for the company's main business is as follows:

1) In 2024-2026, the company's brand marketing revenue is expected to grow at 16%, 15.5%, and 15.0%, respectively; 2) In 2024-2026, the company's performance marketing revenue is expected to be -45%, 15%, and 10%, respectively. Overall, we expect the company's fully diluted EPS in 2024-2026 to be 0.13 yuan/share, 0.16 yuan/share, and 0.23 yuan/share, respectively. Referring to the 62-fold PE valuation of comparable companies in 2025, consider that the company actively lays out AI marketing matrices and explores the digital culture sector, and give the company a 50-55 times PE valuation in 2025, corresponding to a reasonable value range of 8.00-8.80 yuan/share, maintaining a “superior to the market” rating.

Risk warning. The progress of business development in the digital culture sector fell short of expectations, and the commercialization of AI marketing fell short of expectations.