CICC released a research report sayingTodayfreecoinmasterspinsMaintain Weibo-SW (09898) "outperform industry" rating, and raise Non-GAAP net profit forecast for 2024 by 4% to 4%, taking into account the company's efficient expenses.Todayfreecoinmasterspins7.8 billion US dollars, basically maintaining the profit forecast for 2025. Considering the adjustment of profit forecast and the slow growth of brand advertising, the target price is HK $101. Company 1Q24 Revenue 3Todayfreecoinmasterspins.95 billion US dollars, down 4.4% from the same period last year (unchanged at a fixed exchange rate), basically in line with the bank's expectations (US $387 million) and Bloomberg's consensus expectations (US $388 million); Non-GAAP 's net profit was US $107 million, which was better than the agency's consensus expectations (US $85.9 million) and the bank's expectations (US $85.14 million), mainly due to expenses to maintain efficient expenditure.

The main points of the report are as follows:

Advertising revenue was flat in the first quarter compared with the same period last year.

The first quarter is the traditional off-season of the advertising industry, although the external environment and consumption performance in some nodes such as the Spring Festival is relatively positive, but the rest of the time is still relatively dull, the overall brand advertising side budget release of advertisers is limited. Weibo's advertising revenue in the first quarter was 339 million US dollars, down 4.6 per cent from the same period last year (unchanged at a fixed exchange rate), of which mobile phone and game advertisers achieved double-digit year-on-year growth in the first quarter, while cosmetics, especially international brands, remained a major drag. Revenue from value-added services in the first quarter was $56.55 million, down 3.3 per cent from a year earlier (up 1 per cent at a fixed exchange rate).

The gross profit margin is stable compared with the previous month, and the personnel and sales expenses are well controlled.

1Q24 gross profit margin is 78.0%, basically unchanged from the previous month; main operating expenses (sales / management / R & D) decreased by 9.7% compared with the same period last year, exceptTodayfreecoinmasterspinsIn addition to the factors affecting the exchange rate, the company has better control over personnel and sales expenses. The company will say at the performance meeting

The platform's current customer acquisition strategy focuses on high-value users, and pays more attention to the proportion of these users in DAU, so it actively reduces part of the channel delivery. To sum up, 1Q24

The net interest rate of Non-GAAP is 27%, which is basically the same as the same period last year. The month-on-month increase in 10.5ppt is mainly due to the existence of withholding income tax related to dividends in 4Q23.

Pay attention to the budget release of advertisers driven by the peak season / hot spots of the industry.

The company will say at the performance meeting

Weibo plans to work with Tmall in the second quarter to enhance advertisers' perception of the full-link value from Weibo's social impact to e-commerce purchases. As for 2H24, with the help of the Olympic Games and summer film and television entertainment hotspots, the company expects advertisers in industries such as food and beverages and shoes and clothing to contribute to a certain increase. In terms of products, Weibo actively carries out advertising product iterations to magnify social media content marketing and relationship network value, such as the launch of native information flow advertising to speed up the integration of content and advertising, super fans online "text page selection products" and so on. The bank expects that under the fixed exchange rate caliber, Weibo advertising revenue in the second quarter may be basically the same as the same period last year, and the growth performance of advertising revenue into 2H24 is expected to improve gradually.

Risk

Macroeconomic and consumer demand recovery is lower than expected, industry regulatory policies continue to strengthen, industry competition intensifies, investment impairment risk.