Ge Long Hui·2025-05-23 18:13Core Viewpoint - The company reported 1Q25 results that met expectations, with revenue of $397 million, flat year-on-year, and Non-GAAP net profit of $120 million, up 12% year-on-year, exceeding both company and market expectations [1] Revenue Performance - Overall revenue performance remained stable, with notable contributions from automotive and e-commerce sectors. Advertising and marketing revenue was flat year-on-year, while value-added service revenue grew by 2% [1] - The automotive sector benefited from policy incentives and the company's positioning in "new car launch marketing," leading to year-on-year growth in Q1 advertising spend [1] - E-commerce advertising investment saw significant growth, with expectations for increased spending from e-commerce platform clients this year [1] Cost Management - Sales expenses decreased by 7.5% in 1Q25, attributed to the Chinese New Year and various social/entertainment hot topics that drove natural traffic [2] - The company effectively controlled sales expenses by adjusting channel spending in response to environmental dynamics [2] User Engagement - As of March 2025, the company reported a Monthly Active User (MAU) count of 591 million, a year-on-year increase of 0.5%, and a Daily Active User (DAU) count of 261 million, up 2.4% year-on-year [2] AI Strategy - The company's AI strategy focuses on several areas, including AI search, social interaction, content creation, and recommendations [2] - The AI search product, "Smart Search," achieved over 30 million monthly active users in March and was opened to all users in April [2] - AI applications in information flow bidding ads have shown potential to increase Click-Through Rate (CTR) by 10% and improve effective Cost Per Mille (eCPM) [2] Profit Forecast and Valuation - The company maintains its profit forecast, with current stock prices corresponding to 4/4 times the Non-GAAP P/E ratio for 25/26 [2] - The target price is set at HKD 100.8 / USD 13, with potential upside of 48% / 54% for Hong Kong and US stocks, respectively [2]