YAOJI TECHNOLOGY(SZ:002605) China Post Securities·2025-12-22 12:59Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 20% relative to the benchmark index within the next six months [8][12]. Core Insights - The company, Yaoji Technology, reported a revenue of 2.108 billion yuan for the first three quarters of 2025, a year-on-year decline of 24.42%. The net profit attributable to shareholders was 390 million yuan, down 8.00% year-on-year [5][6]. - The decline in revenue is primarily attributed to a contraction in digital marketing business and ongoing pressure on downstream advertising demand. However, the overall gross margin improved to 44.46%, up 6.16 percentage points year-on-year due to the lower-margin digital marketing segment shrinking [6]. - The upcoming festive season is expected to boost demand in the core leisure and entertainment business, with historical data indicating significant revenue growth during this period [6]. - The short drama industry remains vibrant, with the market expected to reach 67.79 billion yuan in 2025, growing by 34.40% year-on-year. The company is well-positioned with its Shanghai International Short Video Center, which has developed over 200 high-fidelity indoor scenes [7]. Financial Projections - Projected revenues for 2025, 2026, and 2027 are 3.376 billion yuan, 3.584 billion yuan, and 3.854 billion yuan, respectively. The net profit attributable to shareholders is expected to be 546.55 million yuan, 626.38 million yuan, and 741.86 million yuan for the same years [10][11]. - The earnings per share (EPS) are forecasted to be 1.31 yuan, 1.50 yuan, and 1.78 yuan for 2025, 2026, and 2027, respectively, with corresponding price-to-earnings (P/E) ratios of 17.80, 15.53, and 13.11 [10][11].