Huafu Securities·2024-05-27 00:02Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative price increase of over 20% against the market benchmark within the next six months [14]. Core Insights - The company reported a Q1 2024 revenue of 29.408 billion, a year-on-year increase of 16.6%, with domestic revenue at 28.417 billion (up 14.22%) and overseas revenue at 0.991 billion (up 193.20%). Adjusted net profit reached 4.388 billion, reflecting a significant year-on-year growth of 10,347.6% [2][3]. - A share repurchase plan was announced, allowing for the buyback of up to 16 billion HKD of Class B shares over the next 36 months, starting June 13, 2024, which indicates the company's confidence in its future development [2][5]. Financial Performance Summary - The gross margin for Q1 2024 was 54.82%, an increase of 8.37 percentage points year-on-year, attributed to changes in business structure and technological improvements. The proportion of high-margin business revenue has increased, with live streaming, other services, and online marketing services accounting for 29.16%, 14.22%, and 56.62% respectively [3]. - The company achieved online marketing revenue of 16.650 billion in Q1 2024, a year-on-year increase of 27.45%, leveraging AI and large language models for enhanced marketing solutions [4]. - The company has repurchased 61.7 million Class B shares worth 3.09 billion HKD as of May 22, 2024, further demonstrating its commitment to shareholder value [5]. Revenue and Profit Forecast - Revenue projections for 2024, 2025, and 2026 are estimated at 125.367 billion, 142.596 billion, and 163.246 billion respectively, with corresponding net profits of 12.770 billion, 18.820 billion, and 24.852 billion. The expected P/E ratios are 18.3X, 12.4X, and 9.4X [6][10].