Investment Rating - The report maintains a "Buy" rating for Mobvista (1860 HK) with a target price of HKD 6 2 [1][3][5] Core Views - Mobvista delivered strong Q1 2024 results with revenue reaching 301million,up2337 154 million, both hitting record highs [1][2] - The programmatic advertising platform Mintegral remains the primary growth driver, contributing 284millioninQ1revenue,up25481 million in Q1, driven by expansion into higher-margin mid-core and hardcore games as well as non-gaming verticals like e-commerce and social [2] - Gross margin improved by 1 3pp YoY to 20 5% in Q1, supported by higher margins in both advertising technology (up 1 4pp to 19 7%) and marketing technology (up 2 6pp to 79 3%) [2] - R&D expenses increased by 57 8% YoY to 30millioninQ1,reflectinginvestmentsinsmartbiddingsystemsandmodeltraining[2]−ThecompanyhasachievedsixconsecutivequartersofprofitabilitysinceQ42022,withoperatingleveragecontinuingtoexpand[2]IndustryAnalysis−TheEU′sDigitalMarketsAct(DMA),effectiveMarch6,2024,isexpectedtofosteramorecompetitivedigitaladvertisingmarketbyregulating"gatekeeper"platforms,creatingopportunitiesforsmallerplayerslikeMobvista[3]−TheDMAislikelytoencourageinnovationandprovideadvertiserswithmorecompliantandeffectivewaystoreachtargetaudiences,benefitingcompanieswithadvancedadvertisingtechnologies[3]FinancialProjections−Revenueisprojectedtogrowfrom1 2655 billion in 2024E to 18721billionin2026E,withaCAGRof18539 1 million in 2024E to $82 7 million in 2026E, with a CAGR of 31 2% [4][9] - Gross margin is forecasted to rise steadily from 20 8% in 2024E to 21 0% in 2026E [4][12] - ROE is projected to improve from 8 2% in 2024E to 13 3% in 2026E, reflecting stronger profitability and efficiency [12]
