Release Date: March 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Weimob Inc (FRA:36W, Financial) reported a stabilization in its subscription business, with new orders showing growth in Q1 2025.
- The company has made strategic adjustments to focus on key accounts and high-quality development, which has started to stabilize overall revenue.
- Weimob Inc (FRA:36W) has successfully integrated AI solutions into its operations, improving efficiency and reducing manpower costs by 30% to 40%.
- The company's advertising gross billing increased by 24.5% year-on-year, indicating strong performance in this segment.
- Weimob Inc (FRA:36W) has reduced its interest-bearing debt significantly, improving its financial stability.
Negative Points
- The company's total revenue for 2024 was down 40% year-on-year, with significant declines in both subscription and merchant solutions revenue.
- Weimob Inc (FRA:36W) faced a challenging macroeconomic environment in 2024, impacting its financial performance.
- The reduction in Tencent's rebate policy led to a significant one-off impact on Merchant Solutions revenue.
- The company reported an overall loss of RMB1.744 billion for 2024, a significant increase from the previous year.
- Despite strategic adjustments, the subscription business is still expected to incur a loss of RMB100 million to RMB200 million in 2025.
Q & A Highlights
Q: Can you provide an outlook for the subscription business in 2025, including key growth areas and expected turnaround?
A: Taoyong Sun, CEO, explained that the subscription business has stabilized, with new orders showing growth. In 2025, deferred income is expected to lead to a 5% to 10% profit growth. Gross profit margin is projected to improve by 15 to 20 percentage points, potentially reaching 70%. The subscription business is expected to break even by 2026, with a loss of RMB100 million to RMB200 million anticipated for 2025.
Q: What are the strategic focuses for the subscription business in 2025?
A: Feng Chun You, President, highlighted the focus on key accounts and industry-based customers, particularly in Smart Retail, which is expected to account for 70% of Subscription Solutions revenue. The company will also enhance ecosystem capabilities, strengthen merchant operation services, and focus on AI integration to improve efficiency and intelligence in operations.
Q: What trends have you observed in WeChat Mini Shops and AI, and what are the plans for 2025?
A: Taoyong Sun noted that WeChat Mini Shops and gift-giving functions have been updated to enhance connectivity and customer engagement. The AI product WIME is already integrated into WeChat Mini Shops, providing proxy services and KOL promotion. The company plans to continue refining these offerings and expects significant long-term value from WeChat e-commerce.
Q: How will Weimob address the decline in advertising rebates and maintain profitability?
A: Taoyong Sun stated that the rebate gap is expected to return to 2023 levels, with a net profit margin of 1 to 1.5 points on gross billing. The company will focus on customer mix adjustments and maintaining healthy profit margins. Feng Chun You added that cost reduction and revenue diversification strategies, including AI integration and media diversification, will support profitability.
Q: What are the strategies for advertising business growth and profit maintenance?
A: Feng Chun You outlined strategies including effective communication with customers about rebate policies, enhancing operational efficiency through AI, and diversifying media channels. The company aims to increase customer investment in multimedia and explore new revenue models to drive growth and profitability in the advertising segment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
