Core views:
Event: The company released the 23A&24Q1 financial report. In 2023, EasyDianxia achieved revenue of 2.143 billion yuan, a decrease of 7.04%; net profit to mother was 217 million yuan, a decrease of 17.20%; net profit not attributable to mother was 167 million yuan, a decrease of 27.21%. The year-on-year decline in profit in '23 was mainly due to the effects of exchange gains and losses, equity incentive payments, etc. In 2023, the company's net profit attributable to mother excluding exchange gains and loss and share payments was 212 million yuan, an increase of 8.99%.
Looking at a single quarter, 23Q4 achieved revenue of 560 million yuan, an increase of 27.91%; net profit to mother was 36.25 million yuan, an increase of 208.81%. 24Q1 achieved revenue of 481 million yuan, an increase of 1.66%; net profit to mother of 50.9 million yuan, an increase of 21.23%; net profit after deducting non-return to mother was 46.83 million yuan, an increase of 26.73%. Due to failure to meet the equity incentive target, the share payment cost was only 7.31 million yuan, 6.06 million yuan after tax. Excluding exchange gains and losses and net profit of 64.33 million yuan from share payments in 24Q1, an increase of 38.75%.
The main business is steady, and the commercialization of AI marketing tools is advancing. Performance advertising achieved revenue of 2,028 billion yuan in '23, a decrease of 6.84%, gross profit margin of 20.80%, an increase of 4.57pct; advertising sales agency services reached 109 million yuan, a decrease of 11.45%. E-commerce advertisers' revenue in '23 was 491 million yuan, down 54.27%, accounting for a decrease of 22.91%, with a gross profit margin of 26.53%, an increase of 17.39 pcts; revenue from apps, entertainment agencies and others was 1,646 billion yuan, an increase of 34.25%, or 76.79%.
According to the official account, Kreado AI has 100w+ registered users, 100w+ monthly user visits, an average monthly payment rate growth rate of about 20%, and an average monthly renewal rate of about 50%. The company plans to pay a cash dividend of 1.1 yuan and a cash dividend of 51.9074 million yuan for every 10 shares in '23.
Profit forecasting and investment advice. We expect the company's 24-25 revenue to be 2,643/32.13 billion yuan, and net profit to mother of 292/352 million yuan. Using the segmented valuation method, the main business was given 35XPE and 15X PS for the new AI business in 24 years, corresponding to a reasonable total value of 12.459 billion yuan, corresponding to a reasonable value of 26.40 yuan/share, maintaining a “buy” rating.
Risk warning. Advertiser confidence is low; overseas advertising growth falls short of expectations; new business development falls short of expectations.