GF SECURITIES·2024-03-21 16:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 89.58 per share, based on a 22x PE valuation for 2024 profits [4][25]. Core Insights - The company reported a significant revenue increase in Q4 2023, reaching CNY 32.6 billion, which is a year-over-year growth of 15% and a quarter-over-quarter growth of 17%, exceeding consensus expectations [9][10]. - The gross margin for Q4 2023 was 53.1%, up 7.6 percentage points year-over-year and 1.4 percentage points quarter-over-quarter, surpassing the expected 51.4% [9][10]. - The GAAP net profit for Q4 2023 was CNY 3.6 billion, corresponding to an 11% profit margin, significantly exceeding the expected CNY 2.16 billion [9][10]. - The Non-GAAP net profit was CNY 4.36 billion, with a net profit margin of 13%, also above the consensus estimate of CNY 3.26 billion [9][10]. User and Content Ecosystem - The Monthly Active Users (MAU) reached 700 million in Q4 2023, a year-over-year increase of 9%, while Daily Active Users (DAU) were 383 million, up 4% year-over-year [9][10]. - The average daily time spent per user was 124.5 minutes, showing a slight decrease from the previous quarter [7][9]. Revenue Performance - Q4 2023 advertising revenue was CNY 18.2 billion, reflecting a year-over-year growth of 21% and a quarter-over-quarter growth of 24% [9][10]. - E-commerce Gross Merchandise Volume (GMV) reached CNY 403.9 billion, a year-over-year increase of 29% and a quarter-over-quarter increase of 39% [9][10]. - The e-commerce monetization rate was 1.07%, with a noted dilution effect from the growth in general merchandise scenarios [9][10]. Profitability Forecast and Investment Recommendations - The company is expected to continue its high growth trajectory in advertising and e-commerce into Q1 2024, with projected revenue of CNY 29.1 billion, a 15% year-over-year increase [9][10]. - For 2024 and 2025, the revenue is forecasted to reach CNY 127.4 billion and CNY 144.6 billion, representing year-over-year growth rates of 12.3% and 13.5% respectively [20][22]. - The adjusted net profit for 2024 and 2025 is expected to be CNY 16.1 billion and CNY 24.4 billion, with profit margins of 13% and 17% respectively [22][25].