SPDB International·2025-11-14 12:27Investment Rating - The report maintains a "Buy" rating for the company, with an adjusted target price of 32 USD / 247 HKD [3][26]. Core Insights - The company reported a revenue of 7.7 billion RMB for Q3 2025, a year-on-year increase of 5.2%, aligning with market expectations. The adjusted net profit was 790 million RMB, exceeding the market forecast of 640 million RMB, with an adjusted profit margin of 10.2% [1][3]. - User traffic has accelerated, with Daily Active Users (DAU) growing by 9.3% year-on-year to 117 million and Monthly Active Users (MAU) increasing by 8.0% to 376 million. The average daily user engagement reached a record high of 112 minutes [1]. - Advertising revenue saw a robust growth of 23% year-on-year, driven by improved ad supply and effectiveness. The company anticipates maintaining over 20% growth in advertising revenue for Q4 2025 [1][3]. Financial Performance Summary - For FY23, the company is projected to generate revenue of 22.5 billion RMB, increasing to 35.8 billion RMB by FY27. The adjusted net profit is expected to turn positive in FY25, reaching 2.5 billion RMB [4][11]. - The operating profit is forecasted to improve from a loss of 5.1 billion RMB in FY23 to a profit of 1.1 billion RMB in FY25 [4][11]. - The report highlights a significant improvement in gross margin, which is expected to rise from 24.2% in FY23 to 38.5% by FY27 [11].