Core Viewpoint - Soul, a leading AI-driven immersive social platform, is rebranding its narrative from "social metaverse" to "AI + immersive social" as it embarks on its IPO journey in Hong Kong after 32 months. The platform has a strong user base, with nearly 80% of its users being Gen Z, and an average daily usage time exceeding 50 minutes, indicating high user engagement and stickiness [2][11]. Financial Performance - Soul's revenue is projected to grow from 1.667 billion RMB in 2022 to 2.211 billion RMB in 2024, with a 17.8% year-on-year increase in the first eight months of 2025, reaching 1.683 billion RMB [5]. - The company achieved its first positive adjusted net profit in 2023, amounting to 361 million RMB, and is expected to maintain profitability in 2024 and 2025 [5][7]. - The sales and marketing expenses as a percentage of total revenue have significantly decreased from 124.8% in 2020 to 38.3% in the first eight months of 2025, while maintaining a gross margin above 80% [7]. User Engagement and Market Potential - As of August 31, 2025, Soul has approximately 390 million registered users, with 11 million daily active users, 78.7% of whom are Gen Z. These users exhibit high engagement, with an average of 75 point-to-point private messages sent daily [11][14]. - The emotional economy market in China is projected to grow from 7.1 billion RMB in 2024 to 90 billion RMB by 2030, with a compound annual growth rate of 52.8% [8]. Global Expansion Strategy - Soul aims to expand globally, targeting markets in North America, Japan, and Southeast Asia, leveraging the universal need for emotional connection across cultures [14][15]. - The IPO proceeds will be used to establish overseas operations and marketing teams, as well as to develop monetization structures for international markets [15]. Challenges and Risks - Soul faces significant compliance and ethical risks, particularly concerning content safety, data compliance, and the protection of minors, which have previously led to platform suspensions [16]. - The company has a substantial financial liability of 12.4 billion RMB related to redeemable shares, which poses a risk to its financial health and necessitates successful IPO financing [17][18].

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]