CICC: Maintains "outperform" rating for WEIMOB INC (02013) with a target price raised to 2.8 Hong Kong dollars.

CICC released a research report stating that WEIMOB INC (02013) maintains its performance forecast for 2024 and 2025. The "outperform industry" rating is maintained, considering the upward trend in industry valuation and increased certainty in mid-term growth. The target price is raised by 56% to HK$2.8. On December 18th, WeChat Mini Program started the grayscale test of the "gift giving" feature. With the gradual increase in activity in the WeChat e-commerce ecosystem, the bank predicts that Weimob, as a leading third-party service provider, is expected to benefit. The main points of CICC are as follows: The new feature test of WeChat Mini Program opens up revenue space for third-party service providers. Weimob has long been providing private traffic e-commerce related services based on the WeChat ecosystem, such as mini-program e-commerce site construction and operation; in addition, Weimob is also a leading service provider for Tencent Video Number advertising. Since August 25, 2024, WeChat officially upgraded video number stores to WeChat Mini Stores, simplifying the process for merchants to enter, and store and product information can flow in multiple WeChat scenes such as public accounts, video numbers, mini-programs, and search. As an e-commerce platform for public domain traffic, the bank believes that WeChat Mini Stores may bring certain impact to small and micro-merchants with urgent traffic acquisition needs for paid store opening tools; since the first half of the year, Weimob has actively contracted its investments in WeChat stores and other businesses related to small and micro-merchants, and the bank predicts that the related impact is gradually dissipating. For brand merchants, precipitation of private traffic is still the core demand for the WeChat ecosystem; the bank believes that with the gradual prosperity of the WeChat e-commerce ecosystem, Weimob can help existing merchants connect public domain (WeChat Mini Stores) and private domain (mini-program stores), and is expected to gain a more substantial customer increment, while further unlocking growth space through ecosystem-related value-added services. Continued investment in product iteration, fully embracing AI Agent. Since October 2022, Weimob has started forward-looking layout of AI, and has gradually formed four major AI layout dimensions: AI + SaaS (empowering SaaS merchants to operate wisely), AI + Marketing (AI-driven smart marketing to reduce costs and increase efficiency), ToB (providing personalized AI solutions), and ToC (providing AI tools for small and micro-enterprises and designers). A comprehensive AI Agent product matrix has been built, covering 15 dimensions including product operations, data consultants, and product selection. Currently, the company has launched three intelligent solutions, Weimob WAI, WAI Pro, and WIME, targeting small and medium merchants, brand merchants, and individual store owners respectively. The bank predicts that as the company's AI product matrix gradually improves and functions mature, and the downstream customers' willingness to pay gradually recovers, the commercialization of the company's AI products is expected to gradually advance.