Summary of the Conference Call for ZhiDeMai Technology Company Overview - **Company**: ZhiDeMai Technology - **Industry**: E-commerce and AI technology Key Points and Arguments Financial Performance - In the first three quarters of 2025, ZhiDeMai achieved revenue of 806 million yuan, with a net profit attributable to shareholders of 13.45 million yuan, representing a year-on-year increase of 253.49% [3][27] - Despite a decline in revenue due to strategic contraction of low-margin businesses, the overall gross margin improved by 3.36 percentage points to 49.52% [2][3] - Sales and management expenses decreased by 20.08% and 14.50% year-on-year, respectively, indicating significant operational efficiency improvements [2][3] AI Investments and Developments - The company has strategically shifted focus to AI, launching new consumer-facing apps and developing AI platforms for business clients [2][4] - AI-related revenue reached 32.22 million yuan in the first three quarters, accounting for less than 5% of total revenue [5][8] - The company defines new revenue from pure AI technology as "AI Plus," which is expected to grow significantly, potentially reaching 80%-90% of total revenue in the future [2][9] Strategic Partnerships - ZhiDeMai has formed strategic partnerships with Huawei and Weimeng Group to advance AI ecosystem development [5][6] - Collaborations include the integration of ZhiDeMai's AI products into Huawei's SaaS platform and the development of middleware infrastructure for the industry [6][8] Future Business Plans - The company plans to enhance its e-commerce ecosystem by collaborating with SaaS infrastructure providers like Weimeng [7][8] - ZhiDeMai aims to penetrate various platforms to connect with numerous small and medium brands, similar to the OpenAI-Shopify model [7][8] - The company anticipates a narrowing revenue decline to within 10% for the year, with profit growth projected at 30%-50% due to seasonal demand and new AI-driven business models [4][27] Product Development and User Engagement - The newly launched Zhang DaMa app has shown strong user engagement, with over 100,000 monthly active users [16][18] - The app focuses on enhancing user experience and is expected to explore monetization through subscription models and premium services in the future [17][19] Market Position and Competitive Advantages - ZhiDeMai's AIUC engine provides a competitive edge in social media sentiment analysis, allowing for more precise insights compared to traditional methods [20][21] - The company is positioned to leverage its unique data and content capabilities to collaborate with larger platforms rather than compete directly [31] International Expansion - ZhiDeMai plans to expand its AI monitoring products and insights platform into Southeast Asia and Europe, aiming for profitability within 12 months in each new market [22][23] Challenges and Solutions - The company acknowledges challenges in data processing and response speed for its AI products, which are being addressed through optimization efforts [28][29] - Continuous improvement in product performance and user experience is a priority to meet growing user demands [29][30] Additional Important Insights - The company is optimistic about its future, expecting AI-driven revenue growth to significantly enhance overall performance [34] - ZhiDeMai's strategic focus on AI and partnerships is seen as a pathway to becoming a benchmark enterprise in global AI applications [34]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is expected to benefit from a comprehensive AI strategy that will enhance its growth potential. The report highlights the ongoing optimization and upgrading of the business structure, which is anticipated to drive long-term growth [4][8] - The company's revenue for H1 2025 is projected at 5.8 billion yuan, reflecting a year-on-year decrease of 19%. However, the net profit attributable to the parent company is expected to increase by 66% year-on-year, primarily due to the recognition of deferred income tax credits [4][5] - The report revises the revenue forecasts for 2025-2027, predicting revenues of 13.7 billion yuan, 15.8 billion yuan, and 18.2 billion yuan respectively, down from previous estimates of 21.4 billion yuan and 24.7 billion yuan. The net profit forecasts are adjusted to 0.9 billion yuan, 1.1 billion yuan, and 1.3 billion yuan for the same period [4][5] Financial Summary - The company's total revenue for 2023 is reported at 1,452 million yuan, with a year-on-year growth of 18.2%. The revenue is expected to decline by 10.1% in 2025, followed by a recovery with growth rates of 15.5% and 15.2% in 2026 and 2027 respectively [7][9] - The gross profit margin for 2025 is projected to be 52.3%, an increase from 48.4% in 2023. The net profit margin is expected to rise from 5.2% in 2023 to 6.6% in 2025 [7][9] - The report indicates a significant increase in the company's monthly average usage of third-party large model APIs, which rose by 84% compared to December 2024, indicating a strong commitment to AI integration [6]

Financial Performance - In the first half of 2025, the company achieved operating revenue of 582 million CNY, reflecting a decline due to strategic contraction of low-margin businesses and short-term impacts from business transformation [3] - Net profit attributable to shareholders reached 12.69 million CNY, a year-on-year increase of 65.75% [3] - Gross margin improved by 2.23 percentage points to 49.20% compared to the same period in 2024 [3] - Sales and management expenses decreased by 19.46% and 17.03% respectively, indicating effective cost control [3] - Net cash flow from operating activities improved significantly to 6.7 million CNY, compared to -48.44 million CNY in the previous year [3] AI Strategy and Development - The company invested 180 million CNY in R&D in 2024, accounting for 11.96% of operating revenue [4] - Significant upgrades were made to the "What Worth Buying" app, enhancing user decision-making through AI-driven features [4][6] - The AI shopping assistant was upgraded from "Xiao Zhi" to "Zhang Da Ma," focusing on user efficiency and personalized shopping experiences [12] - The monthly average consumption of tokens for third-party model APIs reached 73.634 billion in June 2025, an increase of 84.10% from December 2024 [5] - The "Hai Na" MCP Server recorded over 8 million calls in June 2025, with a month-on-month growth exceeding 80% [5] Market Trends and Future Outlook - The e-commerce sector exhibits seasonal characteristics, with the second half of the year typically showing stronger performance [5] - The company anticipates a narrowing of revenue decline in the second half, supported by the peak shopping season [8] - The introduction of national subsidy policies has positively impacted GMV, with a 13% year-on-year increase during the 618 shopping festival [9] - Emerging categories such as new energy vehicles and local services have shown significant growth, validating the company's product iteration strategy [10] User Engagement and Growth Strategies - The new app version has led to a 15% increase in average GMV per user and a 5% increase in content access duration [6] - The company plans to enhance user acquisition efforts in the second half, focusing on expanding new channels and improving user experience [8] - The transition to interest-based consumption has resulted in a nearly 20% increase in user engagement and a retention rate improvement of over 9 percentage points [7] International Expansion - The company has launched local versions of "What Worth Buying" in Thailand and Indonesia, with plans to expand to Vietnam, Malaysia, and Saudi Arabia [12] - The international strategy focuses on content and smart marketing, leveraging AI tools to assist Chinese brands in establishing recognition abroad [12] Conclusion and Future Vision - The CEO emphasized the importance of AI in driving future growth, with a commitment to increasing R&D investment related to AI [15] - The company aims to create unique AI-driven products that enhance consumer decision-making and improve overall user experience [16] - The long-term vision includes establishing a strong position in the AI-driven consumer content ecosystem, balancing both C-end and B-end applications [13]

Investment Rating - The report maintains an "Accumulate" rating for the company with a target price of RMB 42.46 [6][11]. Core Insights - The company achieved a revenue of RMB 582 million in H1 2025, a year-over-year decrease of 18.70%, while net profit attributable to shareholders was RMB 12.69 million, an increase of 65.75% year-over-year [1]. - The decline in revenue is attributed to the strategic contraction of low-margin businesses and related business upgrades, while the increase in net profit is due to improved gross margins and cost reduction efforts [1]. - The "What Worth Buying" platform is expected to continue evolving and solidifying its competitive moat under the influence of AI, supported by long-term technological advantages [1]. User and Content Growth - The "What Worth Buying" app successfully completed an upgrade, enhancing user retention and activity through interest-based recommendations and AI services [2]. - In H1 2025, the platform saw a stable growth in users, with an average monthly active user count of 38.27 million, a year-over-year increase of 1.26% [2]. - The content published on the platform increased by 19.31% year-over-year to 34.04 million entries, with AIGC content rising by 73.63%, accounting for 52.51% of total content [2]. Commercialization and Product Development - The company launched the "Haina" MCP Server, a standardized consumer data service platform, which has already facilitated over 8.22 million content outputs by June 2025, reflecting a quarter-over-quarter growth of 81.73% [3]. - The platform's core interfaces allow partners to integrate functionalities into their own products, indicating a potential acceleration in commercialization [3]. Financial Performance and Projections - The gross margin for H1 2025 was 49.2%, an increase of 2.23 percentage points year-over-year, primarily due to the contraction of low-margin businesses [4]. - Research and development expenses decreased by 8.31% year-over-year to RMB 83 million, attributed to efficiency improvements through AI [4]. - The company forecasts net profits of RMB 131 million, RMB 157 million, and RMB 180 million for 2025, 2026, and 2027 respectively, with corresponding EPS of RMB 0.66, RMB 0.79, and RMB 0.91 [4][10].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 38.40 CNY per share, based on a projected 60x PE for 2025 [2][4]. Core Insights - The company's main business remains stable, with growth potential driven by AI empowerment and overseas expansion [1]. - The financial performance shows a gradual recovery, with 2024 revenue expected to reach 1.52 billion CNY, a year-on-year increase of 4.5% [7]. - The company is focusing on enhancing its app's content ecosystem through AI, with a significant increase in AI-generated content [7]. Financial Forecasts - The projected net profit for the company from 2025 to 2027 is 127 million CNY, 145 million CNY, and 181 million CNY respectively, reflecting a growth rate of 68.4% in 2025 [2][3]. - Revenue is expected to grow from 1.70 billion CNY in 2025 to 2.32 billion CNY in 2027, with a compound annual growth rate of approximately 20.6% [3][10]. - The gross margin is projected to stabilize around 46.9% to 47.6% over the forecast period [3][10]. Business Developments - The company has successfully implemented an AI strategy, leading to a 19.31% increase in content published on its app, with AI-generated content accounting for 44.1% of total content [7]. - The overseas revenue is expected to grow, with a 19.9% increase in 2024, indicating a positive outlook for international expansion [7].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 38.40 CNY per share, based on a 60x PE ratio for 2025 [2][4]. Core Insights - The company's main business remains stable, with potential growth driven by AI empowerment and overseas expansion. The financial performance shows a gradual recovery, with a focus on AIGC applications [1][7]. - The company achieved a revenue of 1.52 billion CNY in 2024, reflecting a year-on-year growth of 4.55%, and a net profit of 75 million CNY, up 0.62% year-on-year [7]. - The "What Worth Buying" app's monthly active users (MAU) reached 3967.8 million in 2024, a 1.0% increase year-on-year, with significant growth in AIGC content generation [7]. Financial Summary - Revenue projections for 2025-2027 are 1.704 billion CNY, 1.925 billion CNY, and 2.322 billion CNY, respectively, with year-on-year growth rates of 12.3%, 13.0%, and 20.6% [3][10]. - The company's net profit is forecasted to be 127 million CNY in 2025, 145 million CNY in 2026, and 181 million CNY in 2027, with growth rates of 68.4%, 14.7%, and 24.8% respectively [3][10]. - The gross margin is expected to be around 46.9% in 2025, with a net margin of 7.4% [3][10]. Business Development - The company is expanding its new business segments, with operational service revenue projected to reach 327 million CNY in 2024, a 17.29% increase year-on-year [7]. - The overseas revenue for 2024 is expected to be 4.807 million CNY, showing a year-on-year growth of 19.9% [7].