Author: Lin Zhibai
Producer: Luo Chao
Before the US stock market on March 24, Momo's parent company, Zhiwen Group, released its financial report for the fourth quarter and full year of fiscal 2021. According to the financial report, the net revenue of Zhiwen Group in the fourth quarter and the whole year exceeded market expectations, the financial data was healthy, and the net asset value was stable.
In the past year, the Internet industries such as live broadcasting and social networking have faced severe tests, and the complex competition situation and strict regulatory system have put forward new requirements for Zhiwen Group. Through the integration of the two fist products of Momo and Tantan, as well as increasing efforts to develop new business pairs, Soulchill and other APP to explore new revenue growth points, Zhiwen Group still handed over a dazzling report card to the market.
Whether local or overseas, there is still incremental space to be tapped in markets such as audio social networking and stranger social networking. Can the new product matrix with Momo as the core help The Paper Group break through?
With four consecutive years of dividend payouts and a resilient business, Momo should not be underestimated
Judging from the core financial indicators, The Group performed stably in the fourth quarter and throughout 2021, with its main live broadcast services and value-added services withstanding increasing competitive pressure and maintaining a good profit level.
In the fourth quarter, the net revenue of The Company was 3.674 billion yuan, the attributable profit was 281 million, and the net profit attributable to the mother not calculated according to the US GAAP was 488 million; for the whole year of 2021, the net revenue of the Zhiwen Group reached 14.576 billion, the net profit attributable to the Zhiwen Group recorded 2.027 billion, and the diluted net profit per ADS unsubstantiated by the US GAAP was 9.56 yuan.
(Photo from the financial report of Zhiwen Group)
It is worth mentioning that according to bloomberg's previous statistics, Wall Street analysts' expectations for the fourth quarter revenue of Zhiwen Group are 3.616 billion, lower than the actual data.
Why is the Group undervalued? We can analyze it from two perspectives.
The first is net asset value and cash reserves.
According to the plan disclosed in the earnings report, the board of directors of The Company intends to pay out $127 million in cash, or $0.64 per ADS. It should be noted that this is the fourth consecutive year that The Group has paid dividends. Coupled with the net cash flow from operating activities of 665.5 million yuan in the fourth quarter, as well as long-term deposits and long-term restricted cash of up to 15.7 billion, the financial situation of The Company can be said to be very healthy.
Secondly, it is the business resilience and growth of Momo's main APP. From the operating profit and user scale of Momo's main APP, we can also see its growth space and undervalued value.
On the one hand, Momo still has a stable hematopoietic ability.
According to the US GAAP measurement, the operating profit of Momo's main APP in the fourth quarter reached 549.3 million, and the continuous growth of virtual gifts and membership subscriptions further stabilized Momo's revenue structure. Momo has always been the number one revenue pillar of Zhiwen Group, contributing more than 80% of the group's revenue, and the basic disk of Momo can be stabilized, and the foundation of Zhiwen Group will not be shaken.
On the other hand, the coordinated development of Momo and Tantan is gradually getting better.
After incorporating Tantan into its company in 2018, Momo has been focusing on the in-depth integration of Momo and Tantan, and comprehensively reorganizing its functions, user operations and internal management structure.
In terms of function, exploring the intelligent recommendation system based on big data and algorithms, as well as the advantages in user scale, can make up for Momo's limitations. Momo's commercialization and refined operation experience accumulated in the early stage can provide help for exploring commercialization and realization.
At present, Tantan has learned from Momo's successful experience and become the vanguard of Zhiwen Group's commercial exploration. In addition to the early attempts such as live streaming with goods and black diamond membership service system, the virtual gift business that has become the revenue growth engine of Momo's main APP is being carried forward in the exploration of the stone-throwing and asking.
After further in-depth integration, it is believed that Momo and Tantan can play a better synergy effect.
The product matrix is further enriched, and The Group grasps both domestically and overseas
If Momo and Tantan represent the present of the Zhiwen Group, then looking at the future, a richer product matrix will undoubtedly provide it with stronger growth capabilities.
In the past two years, Like Tencent, Zhiwen Group has begun to launch various social apps on a large scale. In addition to the stranger social networking that was originally good at it, the main shooting chat click, the positioning of the short video social eye, the hertz specializing in audio social networking, and the Moduoduo based on the real dating scene are intensively available. After a year of casting wide nets and frequent experiments, the Zhiwen Group seems to have finally found a feeling this time.
Among them, hertz and pairs based on the domestic market, as well as Soulchill, which is mainly for overseas markets, have become the focus of the group's new stage of development - these products are aimed at the audio social market with great potential, which is an unmissable outlet.
Ai media data shows that in 2021, the socialization tendency of online audio users is becoming more and more obvious: they prefer to listen to content that fits their needs, has a strong blog interactivity, and can satisfy their desire for self-expression. The rise of Generation Z and the decline of offline social networking due to the impact of the epidemic and other factors have provided growth momentum for online audio social networking.
Statistics show that more than 70% of online audio users are willing to meet friends with the same hobbies through audio, and only 3% of users who clearly say they are unwilling to meet new friends through this form.
(Image from Ai Media Consulting)
In overseas markets, there is a similar situation. According to the calculations of relevant institutions, the global audio social market size of more than 100 billion US dollars, in some countries and regions, has given birth to a number of players with great potential, such as Akagiko's MICO has entered the top ten of the social app best-seller list in more than 100 countries and regions, Yalla and other Chinese audio social apps have gained a firm foothold in the Middle East and Southeast Asia.
Set your sights back on the Zhiwen Group. By the end of 2021, hertz, pair and soulchill, the main products have accumulated a large-scale user base. According to the financial report data, the relatively more mature pair and Hertz achieved profitability in the fourth quarter, and the development of audio social networking by Zhiwen Group has achieved success.
The long-term growth trend of the audio social market is very clear, and the continuous expansion of the user base is also expected. With the advancement of technology and the acceleration of the pace of life and work of modern people, especially The Z generation as the main social group, it is the general trend that consumers' social energy has shifted from video, graphics and text to audio.
On the basis of the small climate of hertz, pair and Soulchill products, there are only two things to do: one is to strengthen localized operations and provide better services according to the social habits of users in overseas markets; second, to improve technology and improve the product experience.
For the latter, Zhiwen Group also has a layout. According to the information revealed on the earnings call, Zhiwen Group is currently paying close attention to the development of cutting-edge technologies such as 3D rendering, AI, motion capture and XR, and investing corresponding resources in development, which is expected to further improve the interactive effect and immersion of its products in the future.
It is worth mentioning that Zhiwen Group has set the goal of having more than a dozen apps with stable profitability and a head position in some vertical fields in the next 3-5 years. Hertz, pairs and Soulchill are good, laying out more matrix Apps and creating explosive products to form more Momo and Exploration, which is also the most anticipated future growth point of Zhiwen Group.
Write at the end
Last August, Momo celebrated its tenth birthday. At a time when the industry is changing rapidly and the traffic dividend in the era of mobile Internet is drying up, it is not easy for Momo to pick up the revenue burden of Zhiwen Group after ten years.
Fortunately, in addition to Momo, Zhiwen Group has gradually built a new product matrix, cutting into tracks such as audio social networking and looking for growth space. With the rise of applications such as Pairs, Hertz, and Soulchill, the pressure on Momo is bound to be greatly reduced. The further enrichment of the revenue structure is also a crucial step for the future growth of Zhiwen Group.