Ge Long Hui·2025-08-23 02:51Core Insights - The company reported better-than-expected performance in Q2 2025, with revenue increasing by 13% to 35 billion yuan and Non-IFRS net profit rising by 20% to 5.62 billion yuan, surpassing market expectations [1] - The company announced its first special dividend of 0.46 HKD per share, totaling 2 billion HKD, reflecting strong cash flow and commitment to shareholder returns [2] Revenue Growth - Q2 revenue growth was driven by strong performance in advertising and other services, with advertising revenue increasing by 13%, supported by key industry advertisers and improved product efficiency [1] - Other services revenue grew by 26%, with e-commerce GMV increasing by 18% to 358.9 billion yuan, indicating a rise in monthly active buyers and repurchase frequency [1] AI Ecosystem Development - The company launched version 2.1 of its AI platform, enhancing productivity and generating revenue of 250 million yuan in Q2, a 67% quarter-on-quarter increase [2] - The introduction of the OneRec end-to-end generative recommendation model aims to improve user engagement and advertising effectiveness, contributing to low single-digit growth in advertising revenue [2] Financial Health and Future Outlook - The company’s decision to distribute a special dividend and its share buyback of approximately 1.9 billion HKD in the first half of 2025 demonstrate its financial strength and commitment to returning value to shareholders [2] - The company expects to double its revenue from the AI segment in 2025 compared to initial forecasts, indicating strong growth potential [2] Valuation and Earnings Forecast - The company maintains its Non-IFRS net profit forecast, with the current stock price corresponding to 14/12 times the Non-IFRS P/E for 2025/2026 [2] - The target price has been raised by 11% to 89 HKD, reflecting a 24% upside potential due to the ongoing upgrades in the AI ecosystem [2]