Weimob (2013) H2 2024 earnings summary

Executive summary

• 2024 was marked by significant adjustment and transformation, focusing on key accounts, smart retail, and contraction of non-core and low-quality business lines, including disposal of Smart Catering.

• Revenue fell 39.9% year-over-year to RMB 1.34 billion, mainly due to a one-off price concession and a major reduction in advertising rebates from Tencent.

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

• Adjusted net loss for 2024 was RMB 533 million, slightly narrowed from 2023, reflecting cost control and business restructuring.

• Strategic focus shifted to high-quality, profitable segments, with smart retail and SaaS business stabilizing in the second half.

Financial highlights

• Total revenue for 2024 was RMB 1.34 billion, down 40% year-on-year; subscription revenue was RMB 918.5 million, down 31.9%; merchant solutions revenue was RMB 420.8 million, down 52%.

• Gross billing for advertising reached RMB 18.01 billion, up 24.5% year-on-year.

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

• Operating cash flow was RMB 332 million, with free cash flow improving by RMB 420 million compared to the previous year.

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

Outlook and guidance

• Revenue and profit are expected to stabilize in 2025, with merchant solutions revenue projected to recover and advertising profit to increase by RMB 120 million.

• Subscription business gross profit margin is expected to improve to 70% or above, with breakeven targeted for 2026.

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

• AI commercialization (YPro, YME, YSaaS) and expansion of AI Agent applications are expected to become new growth engines.

• Continued cost optimization, business focus, and working capital improvements are expected in 2025.