Core Insights - Soul, a social platform, has submitted its IPO application to the Hong Kong Stock Exchange, marking its fourth attempt at going public [1][12] - The company's revenue is primarily derived from "emotional value services," accounting for approximately 90% of total income [2][13] Group 1: Business Model and Financial Performance - Soul's business model is centered around emotional value-driven virtual goods, targeting the Z generation through anonymous social interactions [3][4] - As of August 31, 2025, Soul has approximately 390 million registered users, with daily active users averaging 11 million, 78.7% of whom are from the Z generation [3][4] - Revenue figures show steady growth, with 2022, 2023, and 2024 revenues reported at 1.667 billion, 1.846 billion, and 2.211 billion yuan respectively, reflecting a compound annual growth rate of over 15% [3][4] - For the first eight months of 2025, revenue reached 1.683 billion yuan, a year-on-year increase of 17.86% [3][4] Group 2: Revenue Structure and Profitability - Soul's revenue generation is primarily through emotional value services and advertising, with emotional value services contributing 91.1%, 90.3%, 89.1%, and 90.8% of total revenue from 2022 to the first eight months of 2025 [4][5] - The emotional value service revenue increased from 1.519 billion yuan in 2022 to 1.667 billion yuan in 2023, and further to 1.970 billion yuan in 2024 [4][5] - The company has a high gross margin, with 2024 gross margin at 83.7% and 81.5% for the first eight months of 2025 [5][6] Group 3: Marketing and User Growth Challenges - Soul's marketing expenses have been substantial, with sales and marketing costs of 844 million, 752 million, and 889 million yuan from 2022 to 2024, representing 50.6%, 40.7%, and 40.2% of revenue respectively [6][7] - The user growth appears to be stagnating, with monthly active users dropping from 29.4 million in 2022 to 26.2 million in 2023, and only recovering to 28 million in the first eight months of 2025 [7][17] Group 4: Shareholding and Funding - Since its inception, Soul has raised a total of 402 million USD (approximately 2.842 billion yuan) through seven funding rounds, with Tencent being the largest shareholder, holding 49.90% of the shares [8][19] - The IPO proceeds are intended for enhancing AI capabilities, expanding globally, and developing various content types [20] Group 5: Regulatory and Competitive Landscape - Soul's anonymous user mechanism has led to compliance challenges, with numerous complaints regarding fraud and false advertising [10][21] - The competitive landscape is intense, with established players like Momo and Tantan continuing to dominate the market, posing a threat to Soul's user base and revenue [21][22]

Core Insights - Soul, a platform aimed at creating a "soul social" space, is preparing for its fourth IPO attempt after achieving profitability for two consecutive years, with a focus on "emotional value services" as its main revenue source [2][3][5] Financial Performance - In 2022, Soul reported an adjusted net loss of 0.22 billion RMB, but turned profitable in 2023 with an adjusted net profit of 0.361 billion RMB, and is projected to earn 0.337 billion RMB in 2024 [6][7] - Revenue from 2022 to 2024 showed a compound annual growth rate of over 15%, with figures of 1.667 billion RMB, 1.846 billion RMB, and 2.211 billion RMB respectively [8] - For the first eight months of 2025, Soul achieved a revenue of 1.683 billion RMB, confirming its self-sustaining capability [7][8] Revenue Composition - Soul's primary revenue comes from "emotional value services," which account for over 90% of total income, while advertising services contribute around 10% [10] - The "emotional value services" include virtual goods and privileges, with users paying for virtual currency "Soul coins" to purchase items like customized avatars and virtual gifts [11][12] - Virtual gifts and tools generated approximately 60% of total revenue from 2022 to the first eight months of 2025, with significant contributions from recommendation privileges and AI-related income [15] User Engagement - As of August 2025, Soul had 3.9 million registered users, with daily active users reaching 11 million, predominantly from Generation Z, averaging over 50 minutes of usage per day [4][26] - The percentage of paying users increased from 5.7% in 2022 to 6.5% in the first eight months of 2025, with the average revenue per paying user (ARPPU) rising to 104.4 RMB, the highest in the industry [16] Challenges and Risks - Soul faces challenges related to user quality and safety, with reports of scams and inappropriate content linked to its anonymous platform [17][19] - The company has implemented measures to enhance content moderation and user safety, including the development of anti-fraud models [18][22] AI Integration - Soul is leveraging AI technology, particularly through its self-developed model "Soul X," to enhance user interaction and content creation [22][23] - The AI features aim to improve user engagement by facilitating conversations and matching users based on interests [25][26] - The market for AI and immersive emotional economy is projected to grow significantly, with an estimated size of 7.1 billion RMB in 2024, expected to reach 100 billion RMB by 2030 [25]

Core Viewpoint - Soul, a social platform, is making its fourth attempt to go public in Hong Kong, having previously faced three unsuccessful attempts. The company has shown improved financial performance and a clear business model, attracting significant attention from the market [2][3][5]. Group 1: IPO Attempts - Soul has made four attempts to go public, with the first being in May 2021 for a NASDAQ listing, which was paused due to potential legal issues [2]. - The second attempt in June 2022 to list on the Hong Kong Stock Exchange resulted in the prospectus becoming invalid within six months [3]. - The third attempt in April 2023 also failed, but the company is now trying again with updated financial data and a new business model [3]. Group 2: Financial Performance - Soul's revenue projections for 2022 to 2024 are 1.667 billion, 1.846 billion, and 2.211 billion RMB, respectively, with a compound annual growth rate exceeding 15% [5]. - The company has transitioned from continuous losses to stable profitability, reporting an adjusted profit of 361 million RMB in 2023 [5]. - Gross margins are strong, with rates of 86.3%, 85.5%, and 83.7% from 2022 to 2024, maintaining above 80% [5]. Group 3: Revenue Model - Approximately 90.8% of Soul's revenue comes from AI-driven emotional value services, including virtual goods and membership privileges [6]. - The average monthly revenue per paying user is 104.4 RMB, with a paying user rate of 6.5% [6]. Group 4: Shareholder Structure - Tencent is the largest institutional shareholder, holding 49.9% of Soul, while the founder retains 63.3% of voting rights through an AB share structure [7]. - This structure allows the founding team to maintain control while attracting significant strategic investors [7]. Group 5: User Demographics and Engagement - Soul targets younger users, with 78.7% of daily active users belonging to Generation Z [8]. - The platform shows high user engagement, with an average monthly active user interaction rate of 86.0% and a three-month user retention rate of 80% [8]. Group 6: Future Plans and Challenges - Soul plans to issue 10% to 15% of new shares, aiming to raise between 253 million to 300 million USD, with a post-IPO market valuation projected between 2.5 billion to 3 billion USD [9]. - The company intends to allocate 40% of the funds for developing its AI model, 25% for overseas market acquisition, and 15% for expanding emotional consumption products [9]. - Despite its preparations, Soul faces challenges in a competitive social media landscape and must prove its ability to retain users and gain investor confidence [10].