Weimob (2013) H1 2024 earnings summary

Executive summary

• Revenue for the first half of 2024 was RMB867.4 million, down 28.3% year-over-year, mainly due to macroeconomic headwinds, strategic downsizing, and focus on core business.

• Gross profit fell 29.4% to RMB575.9 million, with gross margin stable at 66.4%.

• Adjusted net loss narrowed sharply by 81.4% to RMB46.4 million, reflecting improved profitability and cost control.

• Operating cash flow turned positive at RMB30 million, a significant improvement from a RMB660 million outflow a year ago.

• All 2021 convertible bonds (US$300 million) were repurchased, improving capital structure and reducing liabilities.

Financial highlights

• Subscription Solutions revenue decreased by 31% year-over-year to RMB487 million, with gross margin at 60.1%.

• Merchant Solutions revenue dropped 24.5% to RMB381 million, but gross margin rose to 74.5%; gross billing increased 19.4% to RMB8,342 million.

• Smart Retail revenue was RMB304 million, down 2.6% year-on-year but up 3.1% organically, now representing over 62% of Subscription Solutions revenue.

• Adjusted EBITDA loss improved to RMB52.8 million; cash and bank balances stood at RMB1,772 million as of June 30, 2024.

• Net debt to equity ratio rose to 37.8% from 21.8% a year earlier.

Outlook and guidance

• Focus on AI commercialization, expanding enterprise-level AI services, and international expansion, especially in North America.

• Continued cost control and efficiency enhancement, with no further major staff reductions planned.

• Deepening industry verticals, especially apparel and FMCG, and leveraging Tencent ecosystem and video accounts.

• New service and interface fees, as well as AI product revenue, anticipated to contribute tens of millions in revenue next year.