HTSC·2025-08-22 02:39Investment Rating - The report maintains a "Buy" rating for the company [7][5]. Core Views - The company reported a 13% year-on-year revenue growth in Q2, reaching 35 billion RMB, which exceeded consensus expectations by 2% [1]. - Gross margin improved by 0.3 percentage points to 55.7%, and adjusted net profit increased by 20% to 5.6 billion RMB, surpassing expectations by 11% [1]. - The company is expected to accelerate its B-end commercialization with the launch of a subscription plan in Q3, potentially driving significant revenue growth [2]. - The advertising revenue grew by 13% year-on-year, slightly above expectations, with a notable increase in the monetization rate of internal advertising [3]. - E-commerce revenue saw a 26% year-on-year increase, with a growing proportion of general merchandise e-commerce [4]. Summary by Sections Financial Performance - Q2 revenue reached 35 billion RMB, a 13% increase year-on-year, exceeding expectations by 2% [1]. - Adjusted net profit for Q2 was 5.6 billion RMB, a 20% increase year-on-year, surpassing expectations by 11% [1]. - The company announced a special dividend of 0.46 HKD per share, translating to a yield of approximately 0.6% [5]. Business Segments - Live streaming revenue grew by 8% year-on-year, while advertising and e-commerce revenues increased by 13% and 26%, respectively [1]. - The advertising segment is expected to see a 13% year-on-year growth in Q3, although it may fall short of the consensus expectation of 16% due to regulatory impacts on overseas advertising [1][3]. - The e-commerce segment's revenue structure is diversifying, with a 26% year-on-year growth in Q2, and the GMV increased by 18% [4]. Future Outlook - Revenue forecasts for 2025-2027 have been adjusted upwards by 0.2%, 0.3%, and 0.9%, primarily driven by accelerated growth in advertising and AI-related services [20]. - The target price for the company has been raised to 85.28 HKD, reflecting an increase in expected contributions from the AI segment [5][24]. - The company is expected to launch a new subscription service targeting professional and enterprise users in Q3, which is anticipated to enhance B-end revenue generation [2].