Since March, Jiaotong Holdings (01450) has successively hit new highs in stock prices during the year, and has quietly emerged from the “five consecutive increases” market. And after receiving an encouraging financial report with revenue growth of over 150%, the optimistic financial data will also add some momentum to the stock price.
As a new retail company driven by technology, Make Friends always insists on using live streaming as a tool, experience as the core, and efficiency as the support to build a channel brand that merchants and consumers can trust. At a time when market sentiment is gradually picking up, making friends is expected to usher in a “Davis double hit” where both performance and stock prices move upward.
Annual performance growth is impressive, and the net profit of the new media business is nearly 200 million
According to the Zhitong Finance App, Make a Friend Holdings is a leading all-media service provider in China. It mainly provides full-case video application services for broadcasters, new media platforms, industry customers, etc., including product sales, video content production, live streaming, and system operation and maintenance services.
Judging from the annual report data, under the complex internal and external economic situation in 2023, the company's performance continued to grow strongly, and its own hematopoietic ability has already been verified. For the whole year, the company achieved revenue of 1,074 billion yuan (the unit is RMB, same below), a sharp increase of 152.4% over the previous year; adjusted net profit was 180 million yuan, a growth rate of 601.3%. Excluding the one-time fair value rebate of about 17 million yuan from the radio and television business, the actual adjusted net profit of the new media business reached about 197 million yuan.
During the reporting period, the company's gross margin continued to be high, increasing 6.2 percentage points to 52.8% compared to 46.6% in 2022, and profitability continued to increase; the live e-commerce business grew strongly in the face of adversity, with an annual commodity transaction volume (GMV) of about 12 billion yuan, which nearly doubled compared to the same period in 2022.
According to reports, during the 2023 Double 11 Shopping Festival, the total GMV for making friends on the Douyin, Taobao, and JD platforms surpassed 2,483 billion, a sharp increase of 178% over the previous year; the number of orders on all platforms exceeded 7.47 million, the total number of viewers of Double 11 exceeded 187 million, and 15,377 products were listed. Following the sale of a domestic commercial satellite during the live broadcast in March, the first domestic cruise ship “Aida Mordu Exclusive Customized Tour” successfully attracted about 10 million visitors, and the amount of exposure increased dramatically. Two days ago, the world's first “licensed to work” domestic air taxi was sold online on the Taobao live broadcast room, setting a precedent for the world's first unmanned manned aerial vehicle sold online since the e-commerce platform was launched.
Up to now, Make a Friend has more than 30 live broadcast rooms on various e-commerce platforms such as Douyin, Taobao, and Jingdong. The matrix-based live broadcast room operation model has been very effective; the number of live streaming fans exceeds 50 million, focusing on the consumer base with high accuracy and achieving high-conversion transactions.
Through the standardized, replicable, and large-scale expansion of the “Matrix Live Streaming Room Operation” model, making friends is gradually growing into a new retail company that empowers the entire live streaming chain with technology, and the outstanding performance of financial data also unquestionably proves that the company is on the right path of development.
Technology empowers the full live streaming chain of multiple vertical matrices to accelerate large-scale expansion
In recent years, the new retail format of “live streaming+e-commerce” has accelerated, and both the market size and penetration rate have increased rapidly. According to analysts from the China Business Industry Research Institute, the scale of live e-commerce transactions in China will reach 4565.7 billion yuan in 2023 and 5563.9 billion yuan in 2024; the penetration rate of live e-commerce transactions in China will increase from 1.6% to 25.3% between 2018 and 2022. The penetration rate is expected to reach 31.9% for the whole of 2023 and 35% in 2024.
Having experienced a stage of barbaric growth stealing traffic, today's live e-commerce industry has entered the path of high-quality development, continuously improving standards of standardization and specialization, and the live e-commerce business trend is maturing.
However, in the second half of live e-commerce returning to rationality, all judging standards that are in line with traffic are no longer effective. Compared to competing for an influencer KOL, delivery expert, or “superanchor,” the company's supply chain, brand power, and infrastructure will be more critical to improving market competitiveness.
It was at this point in time that I made friends and made a new experiment in business model and business logic, starting with the live e-commerce business.
By creating a “matrix live broadcast room operation” model with diversified platforms, diverse anchors, and diverse categories, making friends has successfully expanded on a large scale, and has a broad layout in various fields such as alcohol and food, beauty and skin care, trendy clothing, sports and outdoor, tea and tea utensils, snacks and convenience foods, commuter wear, parent-child lifestyle, children's clothing, and lifestyle.
Up to now, the company has achieved more than 50 million live streaming fans and a cumulative total of 120 million consumers; 30 standardized matrix live broadcast rooms have a total broadcast time of more than 70,000 hours, with cumulative sales of 1 million SKUs; and used live streaming as a means to build a “make friends” channel brand, with a total exposure of more than 38 billion people.
Unlike traditional live streaming companies, which mainly cultivate influencer KOLs, monetize through anchor fans, make friends with standardized operating capabilities and digital innovation capabilities, and focus more on building large-scale live streaming room matrices into an “online department store” operating model.
Specifically, a large number of amateur anchors under Make Friends will act as similar shopping guides to guide consumers to discover higher quality and more cost-effective products. The company's professional team will provide integrated babysitting services from product selection to after-sales to integrated babysitting services. Digital advantages help achieve efficient and accurate user reach and sales transformation.
Through a standardized and replicable matrix-based live broadcast room operation model, it is possible not only to achieve round-the-clock coverage in more categories, but also to get rid of dependence on a single category and a single channel, focus live streaming content more on the product level, and enhance the sustainable development capabilities of live streaming accounts.
The Zhitong Finance App learned that in recent years, I have made friends and continued to actively explore the application of BI in the e-commerce field. The “Friend Cloud” platform independently developed by the company uses big data and artificial intelligence technology to digitize and intelligentize the entire live e-commerce process, and has improved the efficiency of decision-making and management in various aspects such as talent recruitment, merchant entry, popular product recommendation, cold product calculation, and product selection.
In the product selection and planning stage, the market monitoring function can provide a reference for live broadcast room selection and live streaming strategies; during the live broadcast stage, real-time updates of conversion data and refund status allow anchors and operators to dynamically adjust live streaming strategies; in the later review stage, basic data is further segmented and integrated into the data model, effectively improving the company's refined operation capabilities.
As the number of accounts and live streaming sites continues to increase, the labor and time costs of processing large amounts of data are also rising. Make friends and use “technology+talent” to empower the live e-commerce business. Not only can the accumulated data be imported into online visual processing, saving time and labor costs, but the massive data provided by its diversified live streaming matrix will also feed back the company and continuously iteratively optimize the professionalization and intelligence of the big model.
It is foreseeable that the operating model of making friends with content and experience as the core will continuously improve consumer experience and reputation, and help long-term qualitative growth in performance; leading advantages in big data and AIGC capabilities will continue to help the company reduce costs and increase efficiency, achieve “accurate, fast, good, and economical”, and create greater value for consumers and merchants.
Looking forward to the future, making friends will continue to increase investment in technology to empower live streaming, continue to improve the efficiency and accuracy of product selection and live streaming through data, accelerate the penetration rate of products and consumer groups through rapid fission of standardized live broadcast rooms; deepen the industrial belt layout, provide users with high-quality and cost-effective products, enhance user stickiness, and create efficient online customer acquisition channels for manufacturers to break the difficult situation where it is difficult for manufacturers to directly reach consumers.
Furthermore, in a situation where going overseas has become a new trend in the e-commerce industry, the company will also actively lay out overseas markets and create a diversified growth curve. As the cross-border e-commerce industry intensively welcomes favorable policies, overseas markets are expected to bring new growth opportunities to the company.
epilogue
Looking back at 2023, Jiaoyou Holdings received more than 20 awards from the government or media, and its growth heritage was widely recognized by the market. At the Douyin E-commerce Ecology Conference, the company won awards from Influential Author of the Year and Influential MCN Organization of the Year, and won the 2023 Commercial Value Agency Award at the 30th China International Advertising Festival. The short video and “Daikoku Heavy Equipment” live streaming event co-produced by the company also won top international and domestic marketing awards such as the “Effy Award” and the “Great Wall Award”.
Whether it's impressive performance or overall improvement in operating data, it has already verified the development path of making friends and sustainable, high-quality growth. Research reports from relevant agencies point out that the company's price-earnings ratio is far below the valuation level of peer companies, and it is a high-quality target with excellent allocation and cost performance. As future profits are released, there is an opportunity for market valuation to be repaired; from a business perspective, making friends uses scientific and technological innovation as an engine and gradually grows into a new retail company, and its real value is also expected to be re-valued.