- August 18, 2020
- On targeted marketing side, gross billings grew strongly by 156.5% YoY to RMB4.6bn and ARPU rose by 92.1% YoY to RMB177k in 1H20;
- On the SaaS side, contract liabilities reached RMB400mn and revenue came in at RMB305mn, up 39.2% YoY, by adding back RMB92.9mn losses from sabotage;
- ARPU of paying merchants in revenue TTM term rose by 14.2% YoY to RMB6,700 in 1H20;
- Opearing leverage continued to improve as S&M to SaaS revenue ratio and adj. total expense to gross profit ratio declined to 126.8% and 90.8% in 1H20;
- Expecting further upside from Econ recovery, we raise Weimob’s FY20/21E gross billing of targeted marketing and SaaS business revenue by 40%/50% and 4%/12% from previous forecasts, towards RMB13.0bn and 898mn in FY21E;
- We derive our new PT of HK$13.7/sh (28% upside), comprising HK$5.2/sh for targeted marketing and HK$8.5/sh for SaaS, by assuming targeted marketing net profit margin of ~4%, and applying a 20x PE (in line with advertising peers), and a 19x PS (in line with US SaaS peers).
