
Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 71.27 per share, reflecting a reasonable valuation based on projected earnings [3][17]. Core Insights - The company reported total revenue of RMB 31.1 billion for Q3 2024, representing a year-over-year growth of 11% and a quarter-over-quarter increase of 1%, aligning with Bloomberg consensus expectations [1]. - Non-GAAP net profit for Q3 2024 was RMB 3.948 billion, showing a year-over-year increase of 24% but a quarter-over-quarter decline of 16% [1]. - The company achieved a gross margin of 54.33% in Q3 2024, with a year-over-year increase of 2.6 percentage points [1]. - Monthly active users (MAU) reached 714 million, with a year-over-year growth of 4% [1]. - Daily active users (DAU) reached 408 million, reflecting a year-over-year increase of 5% [1]. Revenue and Profit Forecast - The company is expected to balance revenue growth and profit release, with projected revenues of RMB 127.2 billion and RMB 141 billion for 2024 and 2025, respectively, representing year-over-year growth rates of 12.1% and 10.9% [1][17]. - Adjusted net profits are forecasted to be RMB 17.7 billion and RMB 22.5 billion for 2024 and 2025, respectively [1][17]. - The report anticipates a continued focus on short videos and local services, with slight investments to promote stable revenue growth [1]. Advertising and E-commerce Performance - Advertising revenue for Q3 2024 was RMB 17.6 billion, showing a year-over-year increase of 20% [1]. - E-commerce gross merchandise volume (GMV) was RMB 334.2 billion, with a year-over-year growth of 15% [1]. - The e-commerce take rate was calculated at 1.24%, remaining stable year-over-year [1]. User Engagement Metrics - The average daily time spent per DAU was 132 minutes, reflecting a year-over-year increase of 2% [1]. - The report projects MAU growth rates of 3% for 2024 and 2025, stabilizing at 720 million by 2026 [13][14]. Cost and Margin Outlook - The gross margin is expected to improve, reaching 55% and 56% in 2024 and 2025, respectively [17]. - Sales and R&D expenses are projected to be 32% and 10% of revenue in 2024 and 2025, respectively [17].