baccarat3patti| [Broker Focus] Minsheng Securities maintains its fast hand (01024)"recommended" rating, indicating that its profit release continues to exceed expectations

Jinwu Caixun| Minsheng Securities Development Research Indexbaccarat3patti, Quick Hand (01024)24Q1 performance displaybaccarat3patti, 24Q1 total revenue is 29.4 billion yuan (RMB, the same below), yoy+16baccarat3patti.6%; net profit was 4.1 billion yuan, turning losses into profits year-on-year; adjusted net profit was 4.4 billion yuan, year-on-year +10,347baccarat3patti.6%。

The bank pointed out that on 24Q1, the company achieved a gross profit margin of 54.8%, yoy+8.4pct and qoq+1.7pct. The year-on-year increase was mainly due to 1) the increase in the proportion of online marketing + e-commerce revenue with strong profitability;2) the continuous optimization of the revenue sharing cost of live broadcast business;3) the end of optimization to improve usage efficiency, and the proportion of bandwidth and server costs decreased. Driven by the two-wheel drive of increased gross profit margin + improved expense ratio, the company's net profit was 4.1 billion yuan, and the net interest rate was 14.0%. The adjusted net profit was 4.4 billion yuan, and the adjusted net interest rate was 14.9%. The profit side exceeded expectations.

The bank said that the company's commercialization process is advancing and profit releases continue to exceed expectations. The company announced a new round of share repurchase plan: the company can repurchase Class B ordinary shares with a value of no more than HK$16 billion in the next 36 months until the end of the annual general meeting to be held in 2027. The bank expects the company's Non-IFRS net profit in 2024/2025/2026 to be 17.8 billion yuan/22.1 billion yuan/25.7 billion yuan respectively. Based on the stock price on May 22, 2024, the corresponding PEs are 13X/11X/9X respectively. Maintain a "Recommended" rating.