- August 23, 2021
We just published 1H21 results review of Weimob (2013 HK) to reiterate our Buy rating with a new PT of HK$16.5.
- Ex-sabotage subscription solutions (SaaS) revenue grew by 80.3% YoY to RMB549.6mn, fueled by rising ARPU from its successful moving up-market strategy;
- Targeted marketing gross billings rose by 33.1% YoY to RMB6.1bn (RMB833.5mn in revenue, up 11.9% YoY), led by merchant solutions;
- Gross profit reached RMB766.3mn, up 49.0% YoY, thanks to a favorable revenue mix;
- Due to the accelerating strategic investment in S&M and R&D, opex jumped by 176.4% YoY and the company reported adjusted net profit loss of RMB118.8mn.
We reiterate Buy on Weimob, as its LT growth story is intact: 1) TSO business starts getting in shape along with the development of Weimob Cloud Platform and synergies between SaaS and targeted marketing continue to deepen; 2) the strong balance sheet with RMB4.4bn net cash can fuel future growth; 3) it has demonstrated strong execution and resilience amidst macro headwinds. By applying 12x FY23E SaaS revenue and 15x FY23E targeted marketing EBIT, we derive a new PT of HK$16.5.
