Jinwu Financial News | According to CCB International Development Research Report, Weimeng Group (02013)'s performance in the second half of 2023 was disappointing. Revenue was RMB 1,108 billion, 20% lower than the agreed forecast; the adjusted net loss was RMB 110 million, which was roughly in line with expectations. According to the bank, although merchant solutions may continue to benefit from the growth in the number of Tencent video accounts, continued macroeconomic pressure may inhibit SaaS demand, leading to a high turnover rate of small merchants and disrupting the company's strategy of shifting to the “high-end market” of medium-sized merchants.
As a result, the bank lowered its revenue forecast for FY2024/FY2025 by 15%/20%, respectively, that is, revenue is expected to increase 14%/12% year over year, with SaaS growing 10%/10% and merchant solutions growing 22%/15%. At the same time, the bank expects the adjusted net loss to narrow by 79% year-on-year to RMB 83 million in fiscal year 2024, and achieve profit in fiscal year 2025.
In view of Weimeng Group's lackluster SaaS prospects, the bank downgraded the company's rating from “outperforming the market” to “neutral.” The target price was drastically reduced from HK$6.2 to HK$2.1.