Jinwu Financial News | According to the Bank of China Securities Report, the size of the online short drama market in China is on a rapid upward trend. According to data from Ai Media Consulting, China's micro short drama market size (payment, advertising and other derivative revenue) will reach 37.39 billion yuan in 2023, +268% over the same period; the market size is expected to reach 10.68 billion yuan in 2027.
After the equity restructuring between Happy Group and the central enterprise Poly Film Investment, a subsidiary, Beijing Lexiang Huayue Culture Technology Co., Ltd., was established. It mainly develops film and television investment, MCN and other businesses, and cultivates its own traffic for marketing and monetization. The company's 23H1 cross-border e-commerce sales revenue reached HK$1,944 billion, +90.4% over the same period last year. GMV for cross-border e-commerce is expected to reach 700 million US dollars throughout the year.
According to the bank, the company's overseas e-commerce business is expanding smoothly into the market, and it is expected that gross margin will continue to increase as categories are diversified; film and television subsidiaries are actively laying out new tracks with potential. We expect net profit for 2023/24/25 to be -4.39/-2.45/HK$96 million, corresponding to 7.78 times PE in 2025. Maintain the buy rating.