Huafu Securities released a research report saying thatasiangamesguangzhou, give a "Buy" rating to Quick Hand-W (01024)asiangamesguangzhou, estimated revenue from 2024-2026 will be 1,253asiangamesguangzhou.67/1425asiangamesguangzhou.96/163.246 billion yuan, and the parent's net profit was 127.70/188.20/248.52 billion yuan. In 2024Q1, the company achieved revenue of 29.408 billion yuan and adjusted net profit of 4.388 billion yuan, a year-on-year increase of 10,347.6%. The company will repurchase Class B ordinary shares worth no more than HK$16 billion in the next 36 months until the conclusion of the annual general meeting to be held in 2027. The plan will take effect on June 13, 2024.
The main views of Huafu Securities are as follows:
Significant increase in gross profit margin, or due to changes in business structure and technological improvements
The company's 24Q1 gross profit margin was 54.82%, a year-on-year increase of 8.37pct. The increase in the proportion of high-margin business revenue may lead to an increase in gross profit margin. 24Q1 Live broadcast services, other businesses, and online marketing services accounted for 29.16%, 14.22%, and 56.62%, respectively, while 23Q1 accounted for 36.93%, 11.24%, and 51.81% respectively. Technological improvements may bring about an increase in gross profit margins. As technology further improves, bandwidth fees and server hosting costs account for revenue dropped from 6.72% to 4.76%, a year-on-year decrease of 1.96pct.
AI implementation advertising business, subsequent or further increase
24Q1 Company achieved online marketing business revenue of 16.650 billion yuan, a year-on-year increase of 27.45%. 24Q1, the company relies on AI and large language model capabilities to provide customers with full-link efficiency improvement solutions including intelligent creation, intelligent delivery and intelligent user links. In terms of intelligent creation, on 24Q1, the peak single-day consumption of AIGC marketing materials exceeded 10 million yuan. In the smart launch segment, the total consumption of 24Q1's marketing and promotion through UAX increased by more than four times month-on-month.
The repurchase plan may further demonstrate the company's confidence in future development
As of May 22, 2024, the company has repurchased 61.7 million Class B shares with a value of HK$3.09 billion. On June 13, 2024, after the existing share repurchase plan expires, the company will implement a new share repurchase plan. The continuous implementation of the share repurchase plan may demonstrate the company's recognition of the company's value and confidence in future development.