Wondershare(SZ:300624) Guotou Securities·2024-02-03 16:00Investment Rating - The investment rating for the company is Buy-A with a target price of 112.73 CNY over the next six months, compared to the current stock price of 79.80 CNY as of February 2, 2024 [1]. Core Insights - The company is expected to achieve rapid growth in its main business revenue in 2023, with net profit (excluding non-recurring gains and losses) projected to increase by 636.06% to 890.86% year-on-year [3]. - The company continues to innovate and launch new products, including AIGC features across its existing product lines and new AI creative products, which are expected to expand its user base and enhance user value [3]. - The company is adjusting its fundraising purposes to strengthen its strategic layout in the digital creative field, including acquiring a majority stake in Hangzhou GeXiang Technology Co., Ltd. [39]. Financial Performance - The company forecasts revenues of 1.53 billion CNY, 1.94 billion CNY, and 2.41 billion CNY for the years 2023, 2024, and 2025 respectively, with net profits expected to be 0.95 billion CNY, 1.46 billion CNY, and 2.19 billion CNY [24]. - The projected net profit margin is expected to improve from 6.2% in 2023 to 9.1% in 2025, indicating a positive trend in profitability [25]. - The company’s PS valuation is maintained, with a dynamic price-to-sales ratio of 8 times for 2024 [24]. Product Development and Market Strategy - The company has launched the "Tianmu" multimedia model, focusing on digital creative scenarios, leveraging a vast database of high-quality audio and video content [22]. - Strategic partnerships have been established with major players like Huawei Cloud to enhance computational capabilities for AI applications [22]. - The company is actively expanding its product offerings in the AI creative space, which is expected to drive significant growth in user engagement and market share [3][24].