Jinwu Financial News | Anxin International reported that Yingqiu (03700) 1H2023 recorded revenue of 3.13 billion yuan, down 23.0% from the same period last year and significantly improved by 38.4% compared with the same period last year; gross profit margin was unchanged at 42.6% from the same period last year, up 6.4% from the previous year; and the net profit of returning home recorded 190 million yuan, turning losses into profits over the same period last year. Under the influence of regulation and market competition in 2022, the company's performance declined, the company's core business recovered steadily in 2023, and the rise of innovative business skits became the focus of the company's growth in 2023.
The bank pointed out that in the second half of 2022, due to the adjustment of competition and development strategy, the revenue of the business sector declined significantly, and the first half of 2023 has gradually come out of the trough; short drama business is becoming a new business growth point, driving the company's profits to resume growth in 2023; in terms of valuation, the company's net cash level (excluding investment and financial management) is about 1.86 billion yuan, which is much higher than the company's current market capitalization level. Based on a price-to-earnings ratio of 6x of forecast 2023 profits, the bank gave the company a target price of HK $1.18, an expected increase of 51.3 per cent from its recent closing price, maintaining a "buy" rating.