Investment Rating - The report maintains a "Buy" rating for the company, with a target price set at $14.5 based on an 8x P/E ratio for FY25E [1][19]. Core Insights - The company reported a net revenue of $457 million for Q4 2024, showing a year-over-year growth of approximately 0% in constant currency, aligning with Bloomberg consensus expectations. Non-GAAP net profit increased by 40% year-over-year to $107 million, exceeding expectations by 9% due to effective operational expense control [1][2]. - For FY25E, the overall sentiment among advertisers remains mixed, with certain verticals like 3C products and e-commerce increasing ad budgets supported by national subsidy programs, while others like cosmetics and gaming are cautious in ad spending. The company forecasts a 2% year-over-year revenue growth in constant currency for FY25E [1][3]. Revenue and Profitability Forecast - The company expects a slight revenue recovery in FY25E, projecting a total revenue of $1.77 billion, which represents a 2% year-over-year increase, primarily driven by growth in advertising revenue from 3C and e-commerce sectors [3][4]. - The adjusted net profit for FY25E is estimated at $481 million, with an adjusted EPS of $1.81. The report indicates a decrease in the non-GAAP operating profit margin to 31% for FY25E, down from 33% in FY24, mainly due to increased investments in artificial intelligence [4][14]. User Engagement Metrics - As of December 2024, the monthly active users (MAUs) decreased by 1% year-over-year to 590 million, while the daily active users (DAUs) to MAUs ratio improved to 44.1% from 43.0% in December 2023 [2][3]. Dividend Policy - The company announced an annual dividend policy, planning to pay $200 million in dividends for FY24, which equates to an approximate 8% dividend yield [3][4].

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 reached USD 456.8 million, a decrease of 1% year-over-year, or relatively flat on a constant currency basis [10] - Total ad revenue for Q4 2024 was USD 385.9 million, a decrease of 4% year-over-year [11] - Value-added service revenues for Q4 2024 reached USD 71 million, an increase of 18% year-over-year [11] - For the full year 2024, total revenue was USD 1.75 billion, relatively flat year-over-year, or an increase of 1% on a constant currency basis [11] - Non-GAAP operating income for Q4 2024 was USD 136.2 million, representing a non-GAAP operating margin of 30% [11] - Full year 2024 non-GAAP operating income reached USD 584.1 million, with a margin of 33% [12] Business Line Data and Key Metrics Changes - Advertising and marketing revenues for Q4 2024 were USD 385.9 million, a decrease of 4% year-over-year [52] - Mobile ad revenue contributed approximately 94% of total ad revenue in Q4 2024 [53] - Value-added service revenue for the full year 2024 increased by 13% to USD 256 million, driven by membership service growth [53] Market Data and Key Metrics Changes - In Q4 2024, the automotive sector saw solid growth, benefiting from the shift to new energy vehicles [23] - Ad revenue from the online game, cosmetics, personal care, and luxury industries showed a downward trend in Q4 2024 [24] - The food and beverage industry experienced solid growth, boosted by events like the Paris Olympics [58] Company Strategy and Development Direction - The company plans to enhance its content ecosystem and operating efficiency as key goals for 2025 [27] - Focus on integrating social products and revamping the recommendation system to drive user growth and engagement [29] - Investment in AI technologies to enhance product capabilities and improve monetization strategies [43][44] Management Comments on Operating Environment and Future Outlook - Management noted that while some industries faced challenges, there were early signs of recovery in advertising spending due to government stimulus policies [25][26] - The company remains cautious about discretionary categories like cosmetics and luxury goods, which are under pressure [88] - The gaming industry is viewed as uncertain for 2025 due to a lack of blockbuster game launches [94] Other Important Information - The company announced an annual cash dividend of USD 0.82 per ordinary share for the fiscal year 2022, totaling approximately USD 200 million [68] - The Board's capital allocation strategy focuses on balancing long-term growth with shareholder returns [106] Q&A Session Summary Question: Future strategy of AI applications - Management highlighted ongoing integration of multiple AI models and the development of intelligent search capabilities, with a focus on enhancing user experience and monetization [72][73][81] Question: 2025 outlook for advertisement - Management expects positive growth in ad revenue from sectors benefiting from government subsidies, while remaining cautious about discretionary industries [86][88][96] Question: Shareholder return policy - Management emphasized a balanced capital allocation strategy that supports long-term growth while delivering value to shareholders, including the potential for share buybacks [102][106]

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 reached USD 456.8 million, a decrease of 1% year-over-year, or relatively flat on a constant currency basis [10] - Total ad revenue for Q4 2024 was USD 385.9 million, a decrease of 4% year-over-year [11] - Value-added service revenues for Q4 2024 reached USD 71 million, an increase of 18% year-over-year [11] - For the full year 2024, total revenue was USD 1.75 billion, relatively flat year-over-year, or an increase of 1% on a constant currency basis [11] - Non-GAAP operating income for Q4 2024 was USD 136.2 million, representing a non-GAAP operating margin of 30% [11] - Full year 2024 non-GAAP operating income was USD 584.1 million, with a margin of 33% [12] Business Line Data and Key Metrics Changes - Advertising and marketing revenues for Q4 2024 were USD 385.9 million, a decrease of 4% year-over-year [52] - Mobile ad revenue contributed approximately 94% of total ad revenue in Q4 2024 [53] - Value-added service revenue for the full year 2024 increased by 13% to USD 256 million [53] Market Data and Key Metrics Changes - In Q4 2024, the automotive sector saw solid growth, driven by the increasing market penetration of new energy vehicles [23] - Ad revenue from the online game, cosmetics, personal care, and luxury industries showed a declining trend in Q4 2024 [24] - The government introduced stimulus policies in Q4 2024, positively impacting the digital product and e-commerce sectors [25] Company Strategy and Development Direction - The company plans to focus on user growth, content ecosystem enhancement, and operating efficiency in 2025 [29] - There is an emphasis on integrating social products and revamping the recommendation system to drive user engagement [30] - The company aims to strengthen its competitive edge in the content ecosystem and enhance operating efficiency as key goals for 2025 [27] Management's Comments on Operating Environment and Future Outlook - Management noted that while some industries fell short of expectations in 2024, effective cost management allowed for stable operating income [27] - The company expects to see a rebound in macroeconomic conditions and consumer spending as government policies take effect [26] - Management remains cautious about the gaming industry due to a lack of major game launches in 2024 [94] Other Important Information - The company announced an annual cash dividend of USD 0.82 per ordinary share for the fiscal year 2022, totaling approximately USD 200 million [68] - The Board's capital allocation strategy focuses on balancing long-term growth with shareholder returns [106] Q&A Session Summary Question: Future strategy of AI applications - Management highlighted ongoing integration of multiple AI models and the development of products based on large language models, with a focus on enhancing search capabilities and monetization [72][73][81] Question: 2025 outlook for advertisement - Management expects positive impacts from national subsidy policies on automotive and e-commerce sectors, while remaining cautious about discretionary industries like beauty and personal care [86][88][96] Question: Shareholder return policy - Management emphasized a balanced capital allocation strategy that supports long-term growth while delivering value to shareholders, including the potential for share buybacks [102][106]

Core Insights - Weibo Corp reported a fiscal fourth-quarter revenue decline of 1% year-on-year to $456.83 million, surpassing analyst consensus estimates of $437.87 million [1] - The company's adjusted EPS of 40 cents exceeded the analyst consensus estimate of 39 cents [1] - Advertising and marketing revenues decreased by 4% year-on-year to $385.9 million, primarily due to the underperformance of the online game sector [1] - Value-added service (VAS) revenues increased by 18% year-on-year to $71.0 million, driven by growth in membership services and game-related revenues [2] - Monthly active users (MAUs) were 590 million in December 2024, a slight decrease from 598 million year-on-year, while average daily active users (DAUs) increased to 260 million from 257 million year-on-year [2] - The adjusted operating margin declined by 100 basis points to 30%, with profits falling 6.7% year-on-year [2] - As of December 31, 2024, Weibo held $2.4 billion in cash and equivalents, generating $244.0 million in operating cash flow during the quarter [3] - The board of directors declared a cash dividend of $0.82 per ADS and an annual dividend payout of $200 million for fiscal 2024 [3] - WB stock is down 2.60% at $10.48 as of the last check [3]

Core Viewpoint - Weibo Corporation reported solid performance in the fourth quarter of 2024, focusing on high-quality user acquisition and engagement, optimizing its content ecosystem, and maintaining strong operating efficiency while announcing an annual dividend payout of US$200 million for fiscal year 2024 [2][22][23]. Fourth Quarter 2024 Highlights - Total net revenues for Q4 2024 were US$456.8 million, a decrease of 1% year-over-year [6][17]. - Advertising and marketing revenues were US$385.9 million, down 4% compared to the same period last year, primarily due to the underperformance in the online game sector [7][17]. - Value-added services (VAS) revenues increased by 18% year-over-year to US$71.0 million, driven by growth in membership services and game-related revenues [8][17]. - Operating margin for Q4 2024 was 26%, consistent with the previous year, while non-GAAP operating margin was 30%, down from 31% [9][17]. - Net income attributable to Weibo's shareholders was US$8.9 million, a significant decrease from US$83.2 million in the same quarter last year [12][17]. Fiscal Year 2024 Highlights - Total net revenues for fiscal year 2024 were US$1.75 billion, relatively flat compared to US$1.76 billion in 2023 [14][17]. - Advertising and marketing revenues for 2024 were US$1.50 billion, a decrease of 2% year-over-year [14][17]. - VAS revenues for 2024 increased by 13% to US$256.0 million [15][17]. - Income from operations for 2024 was US$494.3 million, with an operating margin of 28%, up from 27% in 2023 [16][17]. - Net income attributable to Weibo's shareholders for 2024 was US$300.8 million, down from US$342.6 million in 2023 [20][17]. Dividend Declaration - The board of directors adopted a cash dividend policy, declaring a cash dividend of US$0.82 per ordinary share for fiscal year 2024, amounting to approximately US$200 million [22][23]. Cash Flow and Financial Position - As of December 31, 2024, Weibo's cash, cash equivalents, and short-term investments totaled US$2.4 billion [13][17]. - Cash provided by operating activities for 2024 was US$639.9 million, compared to US$672.8 million in 2023 [21][17]. User Engagement Metrics - Monthly active users (MAUs) reached 590 million in December 2024, with average daily active users (DAUs) at 260 million [17].

Financial Performance - In Q4 2024, Weibo's net revenue was $456.8 million, a decrease of 1% year-over-year[5]. - Advertising and marketing revenue for Q4 2024 was $385.9 million, down 4% year-over-year, primarily due to a high comparison base from the previous year[7]. - Value-added services revenue increased by 18% year-over-year to $71.0 million in Q4 2024, driven by growth in membership services and gaming-related income[5]. - Operating profit for Q4 2024 was $117.9 million, with an operating margin of 26%[8]. - Net profit attributable to Weibo shareholders in Q4 2024 was $8.9 million, with diluted earnings per share of $0.04[9]. - For the fiscal year 2024, Weibo's total net revenue was $1.75 billion, remaining stable compared to $1.76 billion in 2023[11]. - The fiscal year 2024 advertising and marketing revenue was $1.50 billion, a decrease of 2% from $1.53 billion in 2023[11]. - Value-added services revenue for the fiscal year 2024 reached $256.0 million, an increase of 13% from $225.8 million in 2023[12]. - Operating profit for 2024 is $494.3 million, up from $472.9 million in 2023, with an operating margin of 28% compared to 27% last year[14]. - Net profit attributable to Weibo shareholders for 2024 is $300.8 million, down from $342.6 million in 2023, with diluted earnings per share of $1.16 compared to $1.43 in 2023[15]. - Non-GAAP net profit attributable to Weibo shareholders for 2024 is $478.6 million, an increase from $450.6 million in 2023, with diluted earnings per share of $1.82 compared to $1.88 in 2023[15]. - Cash generated from operating activities for 2024 is $639.9 million, down from $672.8 million in 2023[15]. - The net profit attributable to Weibo shareholders for the twelve months ending December 31, 2024, was $478,637 thousand, a 5.9% increase compared to $450,566 thousand for the previous year[33]. - The adjusted EBITDA for the twelve months ending December 31, 2024, was $606,164 thousand, reflecting a slight decrease from $630,607 thousand in the previous year[35]. Cash and Dividends - As of December 31, 2024, Weibo had cash, cash equivalents, and short-term investments totaling $2.4 billion[10]. - The board approved a dividend of $200 million for the fiscal year 2024, reflecting the company's commitment to enhancing shareholder returns[4]. - The board has adopted a cash dividend policy and declared a cash dividend of $0.82 per share for the 2024 fiscal year, totaling approximately $200 million[17]. - The board will determine the dividend amount based on the company's operating performance, profitability, cash flow, and financial condition[16]. Costs and Expenses - Total costs and expenses for 2024 are $1.26 billion, a decrease of 2% from $1.29 billion in 2023[13]. Comparison with Previous Periods - Total net revenue for Q4 2023 was $463.7 million, a slight increase from $456.8 million in Q3 2023, and $1.76 billion for the full year 2023[27]. - Advertising and marketing revenue for Q4 2023 was $403.7 million, compared to $385.9 million in Q4 2022, while full-year revenue was $1.53 billion, down from $1.50 billion in 2022[27]. - Value-added services revenue increased to $59.9 million in Q4 2023, up from $55.5 million in Q4 2022, with full-year revenue rising to $225.8 million from $226.0 million[27]. - Operating profit for Q4 2023 was $119.0 million, compared to $117.9 million in Q3 2023, and $472.9 million for the full year 2023, up from $494.3 million in 2022[27]. - Net profit attributable to Weibo shareholders for Q4 2023 was $83.2 million, significantly higher than $8.9 million in Q3 2023, with full-year net profit at $342.6 million, compared to $300.8 million in 2022[27]. - Basic earnings per share for Q4 2023 was $0.35, up from $0.04 in Q3 2023, while full-year basic earnings per share increased to $1.45 from $1.27 in 2022[28]. Assets and Liabilities - Cash and cash equivalents decreased to $2.58 billion as of December 31, 2023, from $1.89 billion in 2024[30]. - Total assets decreased to $7.28 billion as of December 31, 2023, compared to $6.50 billion in 2024[30]. - Total liabilities decreased to $3.76 billion as of December 31, 2023, from $2.93 billion in 2024[31]. - Shareholders' equity attributable to Weibo shareholders increased to $3.40 billion as of December 31, 2023, compared to $3.48 billion in 2024[31]. Non-GAAP Metrics - Non-GAAP financial metrics are used to reflect the company's ongoing performance and provide meaningful comparisons across periods[20]. - The company emphasizes that non-GAAP financial metrics should be viewed as a supplement to GAAP metrics and may not be comparable to those used by other companies[22]. - For the three months ending December 31, 2023, the non-GAAP operating profit was $145,856 thousand, representing a 10.7% increase from $131,700 thousand in the previous quarter[33]. - The non-GAAP operating profit margin for the three months ending December 31, 2023, was 31%, compared to 34% for the same period last year[35]. Conference Call - The company will hold a conference call on March 13, 2025, to discuss its financial performance and business operations[18]. Advertising Revenue - Advertising revenue from non-Alibaba advertisers for the three months ending December 31, 2023, was $358,848 thousand, showing a 5.5% increase from $345,528 thousand in the previous quarter[37]. Other Financial Information - The total net income for the three months ending December 31, 2023, was $463,667 thousand, a slight decrease from $464,480 thousand in the previous quarter[37]. - The diluted earnings per share attributable to Weibo shareholders for the three months ending December 31, 2023, was $0.31, compared to $0.53 in the previous quarter[33]. - The company reported a total of 246,382 thousand shares used for calculating diluted earnings per share for the three months ending December 31, 2023[35]. - The revenue from value-added services for the three months ending December 31, 2023, was $59,928 thousand, an increase from $55,000 thousand in the previous quarter[37]. - The company experienced a net investment loss of $(25,544) thousand for the three months ending December 31, 2023, compared to a loss of $(16,905) thousand in the previous quarter[33].

Core Viewpoint - The article discusses the rise of AI-generated misinformation and the measures being taken by social media platforms in China to combat this issue, including the implementation of AI content labeling and stricter content moderation policies [1][5]. Group 1: AI Misinformation and Regulation - On March 11, Weibo announced a governance initiative targeting unmarked AI-generated content, focusing on areas such as social welfare, emergencies, medical science, and personal rights [1]. - Weibo will label content suspected to be AI-generated and may restrict account visibility or even ban accounts that repeatedly post unmarked AI content causing significant harm [1]. - Today's headlines reveal that platforms like Toutiao have also faced challenges with low-quality AI content, having removed over 930,000 such posts and penalized nearly 30,000 accounts for spreading false information [3]. Group 2: AI Content Production and Challenges - The emergence of "AI content farms" has been noted, with reports of individuals generating up to 19,000 AI-written articles daily, distributing them across thousands of accounts for profit [4]. - The cost of generating AI content is extremely low, with estimates showing that one article can be produced for as little as 0.000138 RMB, making it economically viable to flood the internet with AI-generated material [4]. - The challenge now lies in distinguishing between low-quality AI content and genuine articles, as the volume of AI-generated content increases [3][4]. Group 3: Implementation of AI Content Labeling - The requirement for AI content labeling is part of broader regulatory efforts, with new guidelines mandating that both AI service providers and social media platforms must clearly indicate AI-generated content [5]. - Major platforms like Douyin, Kuaishou, WeChat, Xiaohongshu, and Bilibili have begun requiring users to declare whether their content is AI-generated, although compliance has been inconsistent [5]. - The Cyberspace Administration of China has announced plans for a series of actions in 2025 aimed at addressing the misuse of AI technology and enhancing the identification of AI-generated content [5].

Core Viewpoint - Weibo Corporation will announce its unaudited financial results for Q4 and fiscal year 2024 on March 13, 2025, before the U.S. market opens, followed by a conference call to discuss financial performance and business operations [1]. Company Overview - Weibo is a leading social media platform that allows users to create, share, and discover content online, combining real-time public self-expression with social interaction and content distribution [3]. - The platform enables users to create and post feeds with multimedia and long-form content, allowing for asymmetric user relationships where any user can follow others and engage with their content [3]. Advertising and Marketing Solutions - Weibo generates a substantial majority of its revenue from advertising and marketing services, including social display advertisements and promoted marketing offerings [4]. - The company employs a "mobile first" philosophy, displaying content in a simple information feed format and offering native advertisements that align with the platform's content [4]. - Weibo has developed a social interest graph recommendation engine to enhance marketing effectiveness by targeting audiences based on demographics, social relationships, interests, and behaviors [4].

Financial Data and Key Metrics Changes - Weibo's total revenue for Q3 2024 reached $464.5 million, up 5% year-over-year, with ad revenue at $398.6 million, up 2% year-over-year, and VAS revenue at $65.9 million, up 25% year-over-year [13][49][56] - Non-GAAP operating income was $164.5 million, representing a non-GAAP operating margin of 35% [13][49] - Net income attributable to Weibo was $139.2 million, with a net margin of 30% [58] Business Line Data and Key Metrics Changes - Advertising and marketing revenues were $398.6 million, with mobile ad revenues contributing approximately 94% of total ad revenue [50] - VAS revenue growth was primarily driven by membership and games-related services, with a 25% increase [56] - The FMCG sector showed strong momentum in food and beverage and apparel, while the automotive sector continued to grow due to the shift towards electric vehicles [51][52] Market Data and Key Metrics Changes - In September 2024, Weibo's MAUs reached 587 million and average DAUs reached 257 million, reflecting a pullback from the Olympics peak [12][47] - The ad revenue from the food and beverage sector showed strong year-over-year growth, driven by the Olympics [33] - The automotive sector's ad revenue was bolstered by the transition to electric vehicles and effective content ecosystem cultivation [52][35] Company Strategy and Development Direction - Weibo is focusing on enhancing its hot trend marketing capabilities and content marketing to sustain high operating efficiency [43][44] - The company aims to optimize brand and performance-ad offerings to improve competitiveness and expand market share [44] - Weibo's strategy includes leveraging event-driven marketing models, particularly around major events like the Olympics, to attract advertisers [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the advertising market, anticipating a gradual recovery due to government stimulus measures [54][66] - There are expectations for double-digit growth in certain sectors due to national subsidy policies targeting consumer electronics [66] - Despite challenges in the luxury products and real estate sectors, management sees potential for growth in the food and beverage and automotive sectors [66][70] Other Important Information - The Paris Olympic Games significantly boosted Weibo's ad revenue, surpassing that of the Tokyo Olympics [20][33] - Weibo's cash, cash equivalents, and short-term investments totaled $2.2 billion as of September 30, 2024 [59] Q&A Session Summary Question: Fourth quarter advertisement outlook in light of macro stimulus - Management noted a slight decrease in consumer demand but remains optimistic about Q4 due to government policies aimed at boosting demand, particularly in the 3C and consumer electronics sectors [62][66] Question: Drivers behind VAS services growth and future expectations - Management highlighted the continuous growth of membership services and the focus on high-quality user acquisition as key drivers for VAS revenue growth [73][75] Question: Updates on AI progress in content production and operational efficiencies - Management reported significant improvements in operational efficiency through AI applications, including intelligent search functions and AI-assisted content generation for key accounts [80][82]

Investment Rating - The report maintains a "BUY" rating for Weibo, with a target price of US$15.00, reflecting a potential upside of 76.3% from the current price of US$8.51 [2][16]. Core Insights - Weibo's 3Q24 results exceeded expectations, with net revenue increasing by 5% YoY to US$465 million, driven by stabilization in advertising revenue and strong growth in VAS revenue [1][2]. - The company is cautiously optimistic about macroeconomic policy stimulus but anticipates a delayed impact on consumption and advertising demand [1][2]. - Advertising revenue in 3Q24 rose by 2% YoY to US$399 million, primarily due to growth in the food & beverage and automobile sectors, while some sectors like cosmetics and handsets faced challenges [1][2]. - VAS revenue grew significantly by 25% YoY in 3Q24, supported by enhanced membership services [1][2]. - The forecast for 4Q24 indicates a potential decline in advertising revenue by 4% YoY, attributed to a high-base effect and soft demand in certain verticals [1][2]. Financial Performance Summary - For FY24E, total revenue is projected at US$1,755 million, with adjusted net profit expected to be US$466.9 million [5][9]. - The non-GAAP operating profit margin (OPM) for 3Q24 was 35.4%, a decrease of 1.6 percentage points YoY, mainly due to increased sales and marketing expenses [1][2]. - The adjusted EPS for FY24E is estimated at US$1.97, with a gradual increase expected in subsequent years [5][9]. User Engagement Metrics - Monthly Active Users (MAUs) decreased by 3% YoY to 587 million as of September 2024, but the Daily Active Users (DAU) to MAU ratio improved to 43.8% [1][2]. - Total interactions on Weibo's front page increased significantly on a quarter-over-quarter basis, indicating improved user engagement [1][2].