【行业研究报告】微博-Weathering a challenging FY24

15Mar202415Mar2024CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdateWeibo(WBUS)WeatheringachallengingFY24Weiboreported4Q23resultson14Mar:totalrevenuegrewby3%YoY(or+5%YoYonaconstantcurrencybasis)toUS$464mn,vsconsensus/ourestimateofUS$454/458mn.Non-GAAPoperatingincomedeclinedby4%YoYtoUS$146mnin4Q23,7%aheadofconsensus,mainlythankstothestringentcontrolinproductdevelopmentexpenses.ForFY23,totalrevenuedeclinedby4%YoYtoUS$1.76bn,withnon-GAAPOPMupby1pptYoYto33.6%onenhancedoperatingefficiency.Lookingaheadto2024,Weibowillstepupinvestmentincontentanduseracquisitiontoresumetop-linegrowth.WeexpectWeibo’stotalrevenuetobeflatYoY(+3%YoYonaconstantcurrencybasis)atUS$1.77bnin2024,inviewofthemacrouncertaintyandcompetitivepressurefromshortvideoplatforms.WetrimFY24/25earningsforecastby16-19%toUS$451/500mn.WelowerourTPtoUS$18.8on10xFY24Enon-GAAPPE(previous:US$23.5on10xFY24EPE),adiscounttopeers’avgof18x.Thecompany’sbusinessrecoverystilltakestimeanddependsonthemacroenvironment,butweseeWeibo’scurrentvaluationof5xFY24EPEofferenoughsafetymargintocompensatetheuncertainty.MaintainBUY.Addemandrecoverystilltakestime.Adrevenuegrewby3%YoYtoUS$404mnin4Q23(+5%YoYonaconstantcurrencybasis).Byvertical,in4Q23:1)automobileandhandsetverticalssustainedsolidYoYadrevenuegrowththankstonewproductlaunchesandWeibo’sdifferentiatedvalueproposition;2)theonlinegamesverticalsawdouble-digitYoYadrevenuegrowthdrivenbythelaunchofhighly-anticipatedgamesandnormalizinggamelicenseapproval;3)thee-commerceverticaldeliveredYoYandQoQadrevenuegrowthduetosolidaddemandduringe-commercefestivals;4)thebeauty&personalcareverticalremainedunderpressureduetointensivecompetition.For1Q24E,weexpectadrevenuetodeclineby1%YoYonaconstantcurrencybasis,mainlyduetosoftperformanceofbeauty&personalcarecategory.Investtosupportcommunitydevelopment.MAUsincreasedby2%YoYto598mninDec2023.Weibohassteppedupinvestmentinkeycontentverticals(e.g.automobiles,onlinegames,healthcare)toenhanceuserstickinessandmonetization.Verticaltrafficaccountedforc.50%oftotaltrafficin2023,andWeiboexpectthispercentagewillrecovertothepre-pandemiclevel(c.58%)in2-3years.Forusercommunitystrategyin2024,Weibowill:1)strengthencooperationwithstrategicpartnerstoacquirehigh-valueusers;2)optimizesocialproductsandenhancerecommendationefficiency;and3)improveuserexperienceofHotTrendandHotSearchproducts.Enhancingshareholderreturntosupportvaluation.Lookingahead,weexpectnon-GAAPOPMwilldeclineby1.5pptYoYto32.1%in2024E,asWeiboincreasesinvestmentincontentanduseracquisition.ThecompanyannouncedaspecialcashdividendofUS$0.82pershare,whichtranslatesintoac.8%dividendyield.WeexpecttheenhancedshareholderreturntosupportthegradualrecoveryofWeibo’svaluation.TargetPriceUS$18.80(PreviousTPUS$23.50)Up/Downside93.8%CurrentPriceUS$9.70ChinaInternetSaiyiHE,CFA(852)39161739hesaiyi@cmbi.com.hkWentaoLU,CFAluwentao@cmbi.com.hkYeTAOfranktao@cmbi.com.hkStockDataMktCap(US$mn)2,281.1Avg3mthst/o(US$mn)20.052wHigh/Low(US$)20.06/8.10TotalIssuedShares(mn)235.2Source:FactSetShareholdingStructureSina37.3%Alibaba28.9%Source:CompanydataSharePerformanceAbsoluteRelative1-mth4.4%2.4%3-mth-2.8%-11.3%6-mth-19.4%-30.6%Source:FactSet12-mthPricePerformanceSource:FactSetEarningsSummary(YE31Dec)FY22AFY23AFY24EFY25EFY26ERevenue(US$mn)1,8361,7601,7651,8421,891Adjustednetprofit(US$mn)540.1450.6450.8499.8534.1YoYgrowth(%)(24.8)(16.6)0.110.96.9EPS(Adjusted)(US$)2.301.911.912.122.27ConsensusEPS(US$)2.301.912.202.402.44P/S(x)1.21.31.31.21.2P/E(x)52.910.56.65.75.3Source:Companydata,Bloomberg,CMBIGMestimates