Core Viewpoint - Everbright Securities initiates coverage on Zhiyu City Technology (09911), setting a target price of HKD 14.5 and a "Buy" rating, highlighting its leadership in the overseas social sector and successful localization strategy [1] Group 1: Company Overview - Zhiyu City Technology is a leading global social entertainment platform from China, focusing on diverse social experiences for users from various cultural backgrounds, particularly in the Middle East, North Africa, and Southeast Asia [1] - The company achieved revenue of RMB 3.181 billion in H1 2025, representing a 40% year-on-year growth, with SUGO and TopTop revenues both exceeding 100% growth [1] Group 2: Social Business Segments - The core business of the company is its mass social segment, expected to account for over 70% of total revenue by 2024, utilizing a "bush" product matrix strategy to cover diverse social needs through products like MICO, YoHo, TopTop, and SUGO [2] - The company has established operational centers in over 20 countries, with a localized team of approximately 800 people, employing a collaborative model of "Chinese direction, local execution" [2] - The acquisition of BlueCity Brothers enhances the company's position in the diverse social segment, with BlueCity's MAU reaching approximately 7.45 million and a DAU/MAU ratio of 47% [2] Group 3: Innovation and Growth - The company is developing a diversified business ecosystem centered around premium mobile games, social e-commerce, AI, and short dramas, with a focus on collaborative growth [3] - The flagship mobile game, "Alice's Dream: Merge Games," saw over 60% year-on-year revenue growth in 2024, with nearly USD 10 million in revenue by May 2024 [3] - The company is exploring AI-driven social entertainment through its self-developed AIAgent and the AI content community Aippy, while initial results in the short drama sector are promising, targeting Southeast Asia and the Americas [3] - Revenue and profit growth are expected to be robust, with projected revenues of RMB 6.9 billion, 8.41 billion, and 9.7 billion for 2025-2027, and net profits of RMB 0.95 billion, 1.24 billion, and 1.49 billion, reflecting year-on-year growth rates of 97.0%, 31.3%, and 19.7% respectively [3]

Core Viewpoint - Everbright Securities has initiated coverage on Zhibocheng Technology (09911), a leading overseas social enterprise, with a target price of HKD 14.5 and a "Buy" rating, highlighting its successful localization strategy and extensive layout in emerging social entertainment markets, particularly in the Middle East, North Africa, and Southeast Asia [1] Group 1: Company Overview - Zhibocheng Technology is a leading global social entertainment platform from China, primarily focusing on diverse social experiences for users from various cultural backgrounds, especially in the Middle East and North Africa [2] - The company achieved a revenue of RMB 3.181 billion in H1 2025, representing a year-on-year growth of 40%, with SUGO and TopTop revenues growing over 100% [2] - The net profit for H1 2025 reached RMB 489 million, corresponding to a net profit margin of 15.4% [2] Group 2: Business Segments - The company's core business is the mass social segment, expected to account for over 70% of total revenue by 2024, utilizing a "bush" product matrix strategy to cover diverse social products like MICO, YoHo, TopTop, and SUGO [3] - Zhibocheng Technology has established operational centers in over 20 countries, with a localized team of approximately 800 people, employing a collaborative model of "Chinese direction and local execution" [3] - The acquisition of BlueCity Brothers has strengthened the company's position in the diverse social segment, with BlueCity's MAU reaching approximately 7.45 million and a DAU/MAU ratio of 47% [3] Group 3: Innovation and Growth - The company is developing a diversified business ecosystem centered around premium mobile games, social e-commerce, AI, and short dramas, with a focus on collaborative growth [4] - The premium mobile game "Alice's Dream: Merge Games" has seen over 60% year-on-year revenue growth in 2024, with nearly USD 10 million in revenue in May 2024 [4] - Zhibocheng Technology is exploring AI-driven social entertainment through its self-developed AIAgent and the AI content community Aippy, while initial results in the short drama business are emerging in Southeast Asia and the Americas [4] - Revenue and profit growth are expected to be robust, with projected revenues of RMB 6.9 billion, 8.41 billion, and 9.7 billion for 2025-2027, and net profits of RMB 950 million, 1.24 billion, and 1.49 billion, reflecting year-on-year growth rates of 97.0%, 31.3%, and 19.7% respectively [4]

Core Viewpoint - The company, Zhizi City Technology, is experiencing significant revenue growth driven by AI technology and diversified social products, with a strong performance in the Middle East and North Africa market [1][2]. Group 1: Financial Performance - For the first three quarters of 2025, the company's total revenue is expected to be between 4.91 billion to 4.99 billion, representing a year-on-year growth of 37.6% to 39.9% compared to the same period in 2024 [1]. - Revenue from social business is projected to be around 4.38 billion to 4.44 billion, reflecting a growth of approximately 34.5% to 36.4% year-on-year [1]. - The innovative business segment is expected to generate about 530 million to 550 million, with a remarkable year-on-year growth of 69.9% to 76.3% [1]. Group 2: Market Position and Competitive Advantage - Zhizi City Technology is recognized as one of the most competitive players in the Middle East and North Africa social entertainment industry, with strong market potential [2]. - The company has established unique competitive advantages through deep user insights, refined service experiences, and diversified monetization models [2]. - The company’s core products have shown enhanced competitiveness in the Middle East and North Africa, ranking sixth in social network app revenue and ninth in Google Play game app revenue in the region [1]. Group 3: AI and Innovation - The application of AI technology in business scenarios is deepening, particularly in content recommendation and user matching, which enhances product experience and operational efficiency [2]. - The company has signed a strategic cooperation agreement with Tencent Cloud to explore the "AI + social entertainment" space [2]. - The innovative business segment has shown strong growth, driven by traffic monetization, stable development of social e-commerce, and contributions from short drama and premium games [2]. Group 4: Global Expansion - The establishment of the global headquarters in Hong Kong marks a new phase in the company's globalization process [3]. - The Hong Kong headquarters will work in synergy with regional headquarters in Riyadh and Singapore, along with multiple R&D and operational centers worldwide, to support long-term high-quality development [3].

Core Viewpoint - The company is experiencing rapid growth, with significant increases in revenue and profit projections for 2025-2027, driven by a robust product matrix and innovative business strategies [1][2]. Group 1: Financial Performance - The company adjusted its revenue forecasts for 2025-2027 to 69.9 billion, 87.4 billion, and 104.8 billion respectively, up from previous estimates of 65.5 billion, 81.1 billion, and 96.7 billion [1]. - The net profit attributable to the parent company is projected to be 10.4 billion, 12.6 billion, and 15.4 billion for 2025-2027, revised from 9.4 billion, 11.7 billion, and 14.5 billion [1]. - In the first half of 2025, the company achieved a revenue of 31.8 billion, a year-on-year increase of 40%, with a gross profit of 17.8 billion, up 56% [1]. Group 2: Business Strategy and Growth - The company is implementing a "product replication + country replication" strategy, with core products in the Middle East and North Africa seeing over 60% growth [1]. - The social business segment generated 28.3 billion in revenue in the first half of 2025, reflecting a 37% year-on-year increase, supported by deepening local operations and expanding into new markets [2]. - The innovative business segment saw a revenue increase of 71% in the first half of 2025, reaching 3.5 billion, with a gross margin of 73.7%, up 18.4 percentage points [2]. Group 3: AI and Product Development - The company is leveraging AI technology to enhance user engagement, with metrics such as average online duration, payment rate, and ARPU showing steady improvement [3]. - The launch of the AI creative content community Aippy marks the company's entry into the AI Agent and content community sectors [3]. - The social e-commerce business is also growing rapidly, with profits from the health segment increasing by over 100% year-on-year in the first half of 2025 [3].