【行业研究报告】微博-Ongoing moderate recovery

18Nov2022
CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdate
Weibo(WBUS)
Ongoingmoderaterecovery
Weiboreportedits3Q22resultson17Nov.3Q22revenuewasdownby25%
YoY(or-20%YoYonaconstantcurrencybasis)toUS$454mn,largelyinline
withour/consensusestimateofUS$469/460mn.9M22revenuedeclinedby15%
YoY,asthemacroheadwindandresurgenceofCOVID-19weighonad
demand.Non-GAAPnetincomedroppedby43%YoYtoUS$119mn,inlinewith
consensusestimateofUS$120mn.Thedeclinewasprimarilyduetothe
contractionofGPMandinadditiontotheweaktop-linegrowth.For4Q22E,
managementexpectsWeibo’sYoYdeclinerateofrevenuetonarrow,asad
budgetofe-commerceandFMCGadvertisersstabilizeandtheWorldCupmay
furtherboostaddemand.WereviseddownFY23/FY24non-GAAPnetincome
by5/3%astheslowrecoveryofadvertisingdemandcontinuestodampen
Weibo’searningsgrowthoutlook.Welowerourtargetpriceby7%toUS$20.3,
basedon9x2023EPE.MaintainBUY.
EarlyrecoveringtrendinDouble11.Adrevenuewasdownby27%YoYto
US$393mnin3Q22(1Q22/2Q22:+9.5/-23.2%YoY).Weibocontinuedtosee
US$393mnin3Q22(1Q22/2Q22:+9.5/-23.2%YoY).Weibocontinuedtosee
weakadvertisingdemandincategoriessuchasFMCG,e-commerceand3C,
mainlyduetotheweakconsumptionsentimentandtheimpactofCOVID-19.
Thatsaid,Weibostillrecordeddouble-digitYoYgrowthofadrevenuefrom
autoandluxurycategories,asWeibocontinuestoinnovateitsadproductsand
improveadROI.Besides,Weibosawthattheadbudgetfrome-commerceand
FMCGcategoriesduringthisyear’sDouble11returnedtopositiveYoYgrowth
track,showingearlyrecoveryofoveralladdemand.AdrevenuefromAlibaba
droppedby28%YoYtoUS$15.0mnin3Q22,whichislargelyinlinewiththe
overallperformanceofWeiboadbusiness.VASrevenuedeclinedby14%YoY
toUS$60mnin3Q22.
Healthyusergrowthwithenhancedefficiency.Weibo’sMAUsgrew2%
YoYto584mninSep2022,withstableDAU/MAUratioat43.3%.Weibo
sawstrongYoYrecoveryofusertrafficintheentertainmentarea,withuser
trafficviewingTVseriesandvarietyshowrelatedcontentonWeibodoubled
YoYin3Q22E.OverallGPMwasdownby4pptYoYto79.2%in3Q22,as
Weiboincreasedcontentinvestmentandresumedpaymentofcultural
businessconstructionfeesin2022.Thedeceleratingtop-linegrowthand
GPMcontractiondraggednon-GAAPnetmarginfrom34.5%in3Q21to
26.2%in3Q22.Lookinginto4Q22E,Weibowillcontinuetoexecuteits
strategytoreducecostsandimproveoperatingefficiency.
MaintainBUY.WelowerourTPby7%toUS$20.3,basedon9x2023EPE.
Currentvaluationof7x2023EPEwasthelowestamongitspeers.We
expectitsnon-GAAPearningstodeliver9/8%YoYgrowthinFY23/FY24,
andalsoexpectfreecashflowimprovementfromUS$306mninFY22to
US$359/417mninFY23/FY24E.Currentvaluationoffersattractivevalue.