Weimob (2013) H2 2024 earnings summary

Executive summary

• 2024 was marked by significant restructuring, cost optimization, and a shift toward high-quality business, with revenue falling 39.9% year-on-year to RMB 1.34 billion due to one-off price concessions and reduced advertising rebates.

• Gross profit dropped 59.8% to RMB 596.3 million, with gross margin declining from 66.6% to 44.5%.

• Adjusted net loss narrowed slightly to RMB 532.8 million, reflecting cost control and business restructuring.

• Major business restructuring included disposal of Smart Catering and exit from low-margin, non-core businesses.

• AI deployment and ecosystem integration (WeChat, Alipay, HarmonyOS) are central to future growth and operational efficiency.

Financial highlights

• Subscription revenue was RMB 918.5 million, down 31.9%; merchant solutions revenue was RMB 420.8 million, down 52.1%; gross billing for advertising reached RMB 18,014.5 million, up 24.5%.

• Adjusted for one-off items and policy impacts, normalized revenue would be closer to RMB 2.09 billion.

• Operating cash flow was RMB 332 million, with free cash flow improving by RMB 420 million year-on-year.

• Cash and bank deposits stood at RMB 1,779 million at year-end.

• Adjusted gross profit decreased 33.5% to RMB 906.4 million; adjusted gross margin was 61.7%.

Outlook and guidance

• Revenue and profit are expected to stabilize in 2025, with merchant solutions revenue projected to recover and grow.

• Subscription business gross profit margin is expected to improve by 15-20 percentage points, potentially reaching 70% or above.

• Breakeven for subscription business is targeted for 2026, with losses narrowing to RMB 100-200 million in 2025.

• Free cash flow is expected to turn positive in 2025, with an overall improvement of RMB 400 million.

• Focus on WeChat Mini Shop ecosystem, AI commercialization (YPro, YME, YSaaS), and digital retail expansion to new verticals and overseas markets.