Incidents:
On April 23, 2024, Tianxia Show announced its 2023 annual report and 2023 dividend plan.
(1) 2023 revenue of 4.20 billion yuan (YOY +1.77%), net profit of 93 million yuan (YOY -48.43%), net profit not attributable to mother of 74 million yuan (YOY -28.96%).
(2) In 2023, a discovery dividend of 0.155 yuan will be distributed for every 10 shares, for a total of RMB 28.02 million, with a dividend rate of 30.20%.
Investment highlights:
Short-term pressure on 2023 results were affected by credit impairment losses, etc.
(1) 2023 revenue of 4.20 billion yuan (YOY +1.77%), net profit to mother of 93 million yuan (YOY -48.43%), net profit after deducting non-return to mother of 74 million yuan (YOY -28.96%), mainly due to increased media procurement costs and loss of credit impairment (98.11 million yuan). Non-recurring profit and loss of 19.11 million yuan (76.22 million yuan in 2022), mainly from financial management income of 14.57 million yuan, etc.
(2) The gross profit margin in 2023 was 18.02% (21.75% in 2022), mainly due to an increase in media procurement costs; the period expense ratio was 13.65% (2.64pct year-on-year decrease), of which the sales/R&D expenses ratio was 6.0%/2.5%, down 1.7/1.5pct year-on-year, and cost control was better.
(3) Abundant cash on account and strong cash flow. Net cash flow from operating activities in 2023 was $299 million (YOY +52.6%), and cash on the company's accounts was $2.3 billion (YOY +24.8%).
The WEIQ platform has been continuously optimized, and double-ended data has grown steadily.
(1) In 2023, the WETQ platform's revenue was 4.10 billion yuan (YOY +3.67%), accounting for 97.59% (up 1.79pct year on year); gross profit margin was 17.9% (down 3.79pct year on year). The company continues to optimize the WEIQ platform and improve the platform data model. It is expected to more accurately match customer needs and is optimistic about the steady release of celebrity economic value.
① Merchant side: By the end of 2023, the total number of registered merchant customers reached 19,800 (YoY +5%). Providing cost reduction and efficiency to small and medium-sized businesses with AIGC products is expected to bring new business growth to the company.
② Celebrity side: At the end of 2023, the number of celebrity accounts registered on the platform reached 2.935 million (YOY +23.7%), of which the number of professional celebrity accounts was 1.469 million (YoY +41.5%), a significant increase; the number of registered MCN institutions was 17,300 (YoY +15.4%), which has achieved links and celebrity coverage with most active MCN organizations.
(2) In 2023, the revenue of the celebrity economic ecosystem innovation business was 101 million yuan (YOY -41.55%), and the gross profit margin was 22.87% (down 0.18pct year on year).
Innovative businesses such as AI, Rainbow Universe, and digital assets are beginning to take shape.
(1) AI: In 2023, the AI creation tool “Inspiration Island” was launched, supporting more than 30 creative scenarios, embedding the company's full-link social data analysis platform capabilities, and empowering celebrity creators to produce content with AI technology. Nearly 10 million pieces of content have been created for hundreds of thousands of creators in 2023.
(2) Rainbow Universe: The 3D virtual living community “Rainbow Universe” has achieved commercialization breakthroughs and built a new revenue growth point. Cooperate with multiple brands, enter celebrity IPs to interact with fans, and actively launch virtual scene technology services and marketing solutions such as digital cultural tourism, digital performances, and digital exhibitions.
(3) Digital assets: Our subsidiary Starlight Technology has entered the “3D Digital Asset Platform Ecosystem Plan” and launched a data asset service to help enterprises sort out data elements and enter standardized data into tables.
Risk warning: Increased market competition, downward valuation center, regulatory risks, loss of resources for platform influencers, rising media resource costs, asset impairment risk, credit impairment risk, insufficient capital, poor performance, falling short of expectations, innovative businesses such as AI, falling short of expectations, risk of information disclosure, etc.