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微博：Ad revenue growth recovery still takes time
WBWB(WB) 招银国际·2024-05-27 03:02

Investment Rating - The report maintains a "BUY" rating for Weibo, indicating a potential return of over 15% over the next 12 months [2][12]. Core Insights - Weibo's total revenue for 1Q24 decreased by 4% YoY to US395million,withnon−GAAPnetincomedownby4395 million, with non-GAAP net income down by 4% YoY to US107 million, but ahead of consensus estimates due to better control of operating expenses [2][3]. - Advertising revenue is expected to remain flat YoY in 2Q24, primarily due to a decline in the cosmetics and beauty vertical, although management anticipates a recovery in the ad business in 2H24, supported by improved consumer sentiment and the upcoming Olympic event [2][3]. - The target price has been lowered to US17.00fromUS17.00 from US18.80, reflecting a discount to peers' average valuation [2][3]. Revenue and Profitability - Total revenue forecasts for FY24-26 have been reduced by 2%, mainly due to shrinking ad budgets from cosmetics and beauty brands [2][3]. - The adjusted net profit for FY24E is projected at US447million,withaslightdeclineof0.7447 million, with a slight decline of 0.7% YoY, while FY25E and FY26E are expected to grow by 10.1% and 5.7% respectively [3][6]. - Non-GAAP operating profit margin improved to 31.8% in 1Q24, attributed to a 10% YoY reduction in total operating expenses [2][3]. Advertising Revenue Performance - Advertising revenue declined by 5% YoY to US339 million in 1Q24, with the cosmetics and beauty vertical being the primary contributor to this decline [2][3]. - Despite the challenges in the cosmetics sector, domestic beauty brands saw over 50% growth in ad revenue in 1Q24, while other verticals like online games and 3C products experienced double-digit growth [2][3]. User Metrics and Strategy - Monthly Active Users (MAUs) decreased by 1% YoY to 588 million, while Daily Active Users (DAUs) remained flat at 255 million [2][3]. - The company is focusing on acquiring high-quality users through optimized channel investments, which is expected to increase the percentage of high-ARPU users [2][3]. Financial Position - As of March 31, Weibo had cash and cash equivalents of US2.1billion,sufficienttocoverupcomingseniornotesdueinJuly2024andshareholderreturninitiatives[2][3].−Thecompanyisexpectedtomaintainarelativelystablecashposition,withprojectedcashattheendofFY24EatUS2.1 billion, sufficient to cover upcoming senior notes due in July 2024 and shareholder return initiatives [2][3]. - The company is expected to maintain a relatively stable cash position, with projected cash at the end of FY24E at US2.6 billion [10].