Easou Technology (2550) H2 2024 earnings summary

Executive summary

• FY2024 revenue rose 8.1% YoY to RMB604.2m, while net results shifted from RMB25.0m profit to RMB2.0m loss; adjusted profit, excluding IPO intermediary fees, was RMB14.9m.

• Growth in digital marketing and other digital content services was offset by weaker online reading and games revenue; higher selling and administrative expenses and a lower gross margin weighed on earnings.

Financial highlights

• Revenue increased 8.1% YoY to RMB604.2m; gross profit declined 1.5% to RMB255.8m.

• Loss before tax was RMB1.0m versus profit before tax of RMB26.1m in 2023; net loss was RMB2.0m versus net profit of RMB25.0m.

• Adjusted profit was RMB14.9m versus RMB36.7m in 2023, excluding IPO intermediaries fees.

• Cash and cash equivalents increased 80.6% to RMB160.8m; interest-bearing borrowings rose 127.4% to RMB193.1m.

Outlook and guidance

• 2025 R&D priorities include large-model recommendation technology, multimodal data fusion and AIGC applications in advertising, literary, speech and film/TV creation.

• Digital marketing plans emphasize AI-enabled ad optimization and creative generation, expanded e-commerce customer reach and support for domestic customers going overseas.

• Overseas expansion will focus on short-drama recommendation for European and U.S. audiences, using AI to reduce content production costs and improve conversion.

• At least four games are expected to launch in overseas markets in 2025; two games were in testing or trial operation.

• Further recommendation-service expansion is planned across music, video and e-commerce content.