Eclick's senior executives interpret the financial report: it is an irresistible historical trend for Chinese companies to go overseas

Lei Jianping on April 25

EclickWorld (stock code: 301171.HK) SZ) recently released its financial report. According to the financial report, the revenue of Yidian World in 2023 will be 2.143 billion yuan, and the company's net profit excluding foreign exchange gains and losses will be 204 million yuan, an increase of 4.8% over the same period last year.

The revenue in the first quarter of 2024 was 481 million yuan, an increase of 1.66% from 473 million yuan in the same period of last year, the net profit attributable to the parent company in the first quarter of 2024 was 50.0943 million yuan, an increase of 21.23% over the same period of last year, the net profit attributable to the parent company was 46.8291 million yuan, an increase of 26.73% over the same period of last year, and the net profit attributable to the parent company excluding foreign exchange gains and losses and share-based payments was 64.3319 million yuan, an increase of 38.75% over the same period last year.

Today, Zou Xiaowu, chairman of eclick, Wu Ying, CEO, Wang Yizhou, CTO, and Wang Ping, secretary of the board of directors, communicated with investors. As a veteran of serving Chinese enterprises to go overseas for 10 years, Zou Xiaowu pointed out in the conference call that it is almost an inevitable choice for Chinese enterprises to develop, go overseas or globalize, and going overseas is also an unstoppable historical trend.

Zou Xiaowu believes that if Chinese enterprises want to succeed in going overseas, the core is to have a group of global entrepreneurs, have a global vision and pattern, and can truly integrate talents, supply chains, capital, and comprehensive integration on a global scale.

"I think the next few decades will be a vigorous period of internationalization of Chinese enterprises, and there will definitely be a lot of well-known enterprises and a lot of well-known entrepreneurs. ”

The following are some of the contents of the earnings call of EclickWorld:

Question: At present, many Chinese enterprises have encountered certain bottlenecks in their development, and going overseas is a direction, from the perspective of Yidiantianxia, which fields are easy for Chinese enterprises to go to sea, and which overseas pits need to be avoided?

Zou Xiaowu: EclickWorld has been serving Chinese enterprises to go overseas about 10 years ago, so we have a deep feeling about the entire Chinese enterprises going overseas. Now all the enterprises in the United States are basically global enterprises, and the profits of the enterprises are very high, essentially because they are born global, and they earn global profits. In the middle, I think it was Japanese companies, maybe 40 years ago, they also went global through the expansion of the automobile industry.

Globalization is an expansion of China's economy to the world. If Chinese companies want to develop, go overseas or go global, it is almost an inevitable choice, if a company wants to grow bigger, want to become more competitive, almost to go to the world to compete with enterprises in various countries, I think this is an almost inevitable road.

What we have seen in the past 10 years is the advertising growth of the entire overseas industry, and it has maintained double-digit growth every year so far. From the logic behind it, from the data, going overseas is an unstoppable historical trend.

Which fields are easy to go to sea, or which fields will have opportunities, I see it this way, the core is whether our new group of global entrepreneurs have a global vision and pattern, whether they can truly integrate talents, supply chains, capital, and comprehensive integration on a global scale. From this point of view, I think that now China has a group of such outstanding entrepreneurs who have come out to integrate resources, look at the market, and compete on a global scale.

Of course, from the perspective of actual landing, we have to look at what things China currently has existing advantages, I think in the manufacturing industry in the supply chain, the advantages of many categories are very obvious, China has hundreds of industrial belts, the world's consumer goods, many categories of production 60 or 70% of the production in China, China's labor costs and China's current degree of automation, all make us in the product cost of this area of scale effect. So I think this is the first established advantage that we have as a Chinese entrepreneur at the moment.

The second is that China's mobile Internet in the past 10 years has created a lot of talents, and the talent pool of the entire Internet is also very sufficient in China, and the advantages of engineers are also very obvious. To a certain extent, Internet AI has become the foundation of the entire business. So as a Chinese company, I think the advantages in both areas are very clear. Another advantage is that Chinese entrepreneurs are very diligent, compared with global entrepreneurs, I think Chinese entrepreneurs are still working hard and have a sense of purpose that is very high in the world.

Under the blessing of these advantages, as long as the whole Chinese entrepreneurs can really go to the target market, can be close to the user, really understand the needs of the user, in this ring to strengthen a little, I am very confident in the global competition of Chinese enterprises, I think the next few decades are the international of Chinese enterprises vigorous decades, I believe that there will be a lot of well-known enterprises, there will be a lot of well-known entrepreneurs.

We've seen a lot of clients in the last 10 years, and they've really grown from zero to hundreds of billions of dollars, and it's exciting and exciting to be a part of this wave, and then to be able to serve so many great entrepreneurs and help them grow with them at the same time, which is very interesting and exciting at the same time.

It may be like this in the next twenty or thirty years, and now the international situation seems to be very complicated, but in fact, I think that except in a very few fields, such as AI, new energy, and automobiles, most fields actually can't stop Chinese at all. In the past 10 years, China has seen a large number of successful overseas entrepreneurs, and the impact on surrounding entrepreneurs is also very positive.

Question: If entrepreneurs want to go overseas, what are the good suggestions for eclick?

Zou Xiaowu: The core is that the local laws and regulations in each market are very different, but up to now, there are already Chinese companies in every market, whether it is the Internet or manufacturing, and there are already Chinese companies in various industries that have achieved results locally.

I think that now that Chinese enterprises are internationalizing, as long as they can go to the local area, they may encounter various problems, in fact, there are already people who have passed this road. For Chinese entrepreneurs, they should be more determined to go out and go to the global market, and I think the next 20 years will be an opportunity for Chinese enterprises.

Question: The company's revenue growth in the first quarter is high, the source of the increase in overseas expansion, and the future growth trend.

Wu Ying: The rapid development of the whole sea in the past 10 years has now reached a new height, because with the degree of competition in the domestic market, many companies have changed their slogan to go out or go all in last year, and these are all the increments we see.

In terms of the general trend, there are three aspects of increment, the first is that we first see that whether it is Temu or TikTok, or Shein and Alibaba, they will still maintain a very high-speed growth from about 2023, and the further rise of platform e-commerce and the expansion of the global market have brought a new high of cross-border e-commerce. Based on platform e-commerce, we can see that for the company's increment, the expansion of platform e-commerce itself has brought about the expansion of the overseas market, and the rise of platform e-commerce has led to the expansion of ecological enterprises.

So we can also see that there are a lot of new service opportunities based on the platform, the original for cross-border e-commerce enterprises, the threshold for going to sea is very high, to do consumer insight, to select products, to do independent stations, to do marketing, but now the platform e-commerce is actively promoting the full custody model, semi-custody model, essentially reducing the threshold for this batch of supply chain enterprises to go to sea.

In fact, a group of supply chain enterprises that were not originally doing to C to go to sea were brought to the platform e-commerce to make the sea, which is the first big increment we have seen, not only the rise of platform e-commerce, but also the rise of the entire industrial chain driven by the platform.

This afternoon, we will also co-host the first POD fully managed investment promotion event in Xi'an with SHEIN, which is not only for us to expand new business with SHEIN, but also to deepen the industry and help local industrial belt merchants to enter SHEIN's platform to get more development space, and we are also expanding the scope of services based on platform e-commerce.

The second point is to talk about brands going overseas. In the 1.0 and 2.0 era of cross-border e-commerce, it is more about doing industrial chains and supply chains going overseas. In the 3.0 era, we see more brands going overseas. China has a very strong supply chain advantage, and our own product strength and innovation have been greatly improved, such as the rise of overseas brands such as Lege and Anker.

On the other hand, China's cross-border e-commerce has come to the 3.0 era, and we already have the necessary conditions and potential energy, how to help this group of innovative and product-powerful enterprises to truly achieve brand success in the world is also what Eclickworld continues to do, including last year, we helped Cudi Coffee to make a full set of digital solutions, and helped them to do the recruitment of offline franchisees, including like Lege shares, we are based on the platform e-commerce of Amazon, and further help them expand their own brand independent stations. This is the second change.

The third point, we can also see the output of the Chinese model, like this wave of AI, although there are many restrictions on the development of the underlying infrastructure and underlying technology, but in the past, China's success in the Internet model has actually accumulated a very large number of entrepreneurs with model innovation, including the output of short dramas in the Chinese market, you can see that the output of short dramas in the global world, we call this kind of increment the output of the Chinese model, which is the third batch of increments that we can see.

Based on this general trend, eclickworld is also targeting customers in different trends, their needs for services are different, and their requirements for our capabilities are also different, so we continue to create differentiated solutions for different industries and different types of customers.

Of course, all these major premises are inseparable from the fact that we are a marketing service company, and we continue to do it, whether it is based on big media, or based on the improvement of the capabilities of medium and long-tail media, for example, medium and long-tail media, which is a very advantageous subdivision of eclick, and at the same time, we are also opening up some resources from offline to online to help customers do full-link monitoring, for example, last year, we helped Transsion not only do online advertising in Southeast Asia, but also help them do outdoor advertising, and how to do online and offline linkage, which is some of the foundations for eclickworld to be able to differentially serve different customers。

Q: What is the current progress of KreadoAI, and can AI technology really improve efficiency and bring incremental growth to the company?

Wang Yizhou: KreadoAI, we officially launched it in July last year, after the launch, there are indeed many market customers and media who have given us very high attention, let's talk about the data first, so far, KreadoAI has covered 203 countries around the world, and the number of registered users and monthly user visits has exceeded one million. Especially users in regions like China, the United States, India, Europe and the United States, and then Brazil, both in terms of the number of users and the activity, are actually quite high.

There are two points I want to mention here, one is that our average monthly payment rate has a relatively obvious increase of about 20%, and the renewal rate has also increased by almost 50%. With the improvement of these two indicators, we can actually clearly feel the real affirmation of users for us. When it comes to whether it can really help companies and customers, we have to mention the most important application scenarios in KreadoAI, one is to make commercial pictures, the cost can be reduced by about 98%, and basically the pictures can be produced in 2~3 minutes.

In terms of video production, we have shortened from 12 hours to almost 5 minutes, and the production cost is only about 1% of the cost of real people, which I believe is the main reason why we have been able to get so many users in such a short period of time, and we can get the user payment rate and renewal rate increase.

In the future development of KreadoAI, with the blessing of AI technology, we will be able to help users improve efficiency and reduce costs in many scenarios and in the whole link of advertising and marketing, which is the most important development direction of marketing AI that KreadoAI can provide for users.

KreadoAI not only has in-depth cooperation with global users, but also with many well-known companies, including a series of companies such as Alibaba, Lazada, Bilibili, Ctrip, and Xike, and we will continue to deepen our efforts in these industries in the future, and work with customers to explore and accumulate industry experience and professional capabilities.

Because we think that there is actually a big difference between industries, AI as a basic capability of the base, how to integrate this basic capability and industry experience and industry needs on the large amount of private domain data we have accumulated, and finally make a product that can really help customers improve the effect in specific scenarios is the direction and problem that KreadoAI continues to develop and think about.

In the direction of product force, we think that when making tools and products, we must avoid an inertial thinking, that is, you hold a hammer in your hand and look at everything like a nail. Although we have accumulated a lot of experience in the production of advertising materials such as digital humans, Wensheng pictures, and advertising materials.

But in fact, with the development of the market and the changes of the industry, there are new needs anytime and anywhere, and in the future, we will not only focus on the polishing of our existing functions, but also do some extension and development on new functions. This is mainly accompanied by our observation and attention to the market, if there is a new direction, we will also have in-depth communication with you and product release in the follow-up process.

Question: What is the company's layout in the field of short dramas?

Wu Ying: At present, short dramas going overseas is indeed a very big hot spot, last year's market space for Chinese overseas short dramas may be less than 200 million US dollars, this year we predict that short dramas in overseas markets may be tens of billions of US dollars, we also see that there are already a lot of pioneer companies have achieved very good results and results through this kind of business, such as our service reelshort, Dreame and Kyushu ShortTV and so on.

However, we still think that short-term going overseas is still in the early stage, and in the process of communicating with all these top players, we will also see that they are actually limited in production capacity at present, because the so-called short drama going overseas is really lacking overseas localized content.

Overseas localized content essentially depends on its own productivity, that is, the ability to shoot and produce.

We will see that all these leading manufacturers have been deployed overseas, whether it is in the United States, Australia, or Eastern Europe and other countries, they are already improving their productivity capabilities. Therefore, we expect that in the second half of this year, content may no longer become a bottleneck in the production of short dramas, so when content is not a bottleneck, whether the content is high-quality will become the main determinant of the healthy and long-term steady development of the business, and whether the market size of short dramas can move from tens of billions of dollars to hundreds of billions of dollars, and whether there will be the rise of some new platforms, we are continuing to wait and see.

In addition, we are constantly discussing with these leading companies we serve how to help them verify the effect of precise user positioning, click-through rate and conversion rate in the process of rapid development of the industry, so as to help them further reduce the cost of trial and error.

At the same time of cooperation, we will also notice that with the improvement and continuous optimization of the technical capabilities of AI and large models, we are also continuing to pay attention to how AI empowers the production and marketing of short dramas, which are also what we are currently continuing to do. In addition to functions such as the synthesis of real characters and virtual characters, AI script generation and content production capacity can help short drama companies reduce costs, improve quality and efficiency.

In general, we will closely understand the changes in the landscape and the number of users of overseas short drama platforms, and will continue to serve leading companies, seize new opportunities for overseas short dramas, and continue to empower advertisers with AI technology in the new wave, so as to bring better results and more returns to advertisers.

Q: What are the follow-up plans for the company's dividend and buyback plans?

Wang Ping: We have clearly written the dividend policy into our articles of association, which states that as long as the company is profitable, we will distribute it in cash, and the profit will not be less than 10% of the realizable profit of the year. Therefore, we will maintain a dividend of no less than 10% of the profit every year to strengthen the rights and interests protection mechanism of small and medium-sized investors, and give back to shareholders and society.

Since its listing, EclickWorld has continued to follow the dividend policy every year, taking into account the company's long-term development and the return to investors, and our dividend ratio this year is 23% of the year's profit.

In addition, for the repurchase plan, we are actually very, very confident in the company's business development, the repurchase, on the one hand, is to safeguard the interests of the majority of investors, enhance the confidence of investors. On the other hand, it is also improving the company's long-term incentive mechanism, fully mobilizing the enthusiasm of employees, and promoting the company's long-term development.

The company will insist on considering the company's normal operation and long-term development at the same time, pay attention to the interests of the majority of investors, especially to safeguard the interests of small and medium-sized investors, with a positive and stable dividend policy and timely repurchase plan to return investors, but also hope that everyone can supervise us, and give us more valuable opinions and suggestions.

Q: How does the company view the current use of artificial intelligence and AI technology by leading media to improve advertising efficiency, and does this have any impact on the company's long-term development?

Wang Yizhou: GPT, Google's Gimini, Meta's Llama, etc., which are all familiar to us, are some of the investments made by leading media around the world in AI. It can be seen that, first of all, the main manifestation of the investment of head media in AI is that they are more willing to invest in the direction of large models, which is also more in line with the size of their own enterprises, the future business positioning and other aspects, but from what they do, it can also be seen that they are more inclined to invest in the direction of some universal large models.

We are really concerned about how to improve the efficiency of advertising and marketing, and the improvement of technology is the top priority, whether it is digital technology, information technology, cloud technology or AI technology, it is our very important underlying tool.

It is precisely because we have recognized this very early on that we are the first batch of companies in China to access large language models such as GPT-4, Anthropic, PaLM, LLaMA and visual large models such as SD and MJ, and have fine-tuned and retrained them based on the cognition and experience accumulation of the marketing industry.

Coming back to the question itself, on the one hand, the investment of leading media in AI is actually a win-win situation for both of us. On the other hand, we can also understand that behind this problem, we are worried about whether the improvement of AI technology and the improvement of the efficiency of big media will have some negative impact on our business.

On the one hand, the investment in AI of big media is actually technically helpful to us, and secondly, for top media, the core business value and business goal is how to maximize the monetization of their advertising traffic.

On this basis, we often improve the conversion rate of advertising, improve the accuracy of advertising materials, so as to more accurately target the population, etc., and comprehensively use a number of data, information, cloud technology and other resources to ultimately improve the effect feedback on the advertiser's side, forming a closed-loop, upliftable, and mutually beneficial full link. The main difference and difference between us and the head media is that it is often difficult for the head media to pay attention to this field, which is one thing.

The second point is that although what we are doing is on the side of advertisers, in fact, there is no conflict with the platform and the head media, on the contrary, you can also see that we have always had a long-term, stable and good cooperative relationship with the head media, whether it is technical or commercial cooperation, so why?

It is because for the head media, the improvement of the advertiser's product ability and advertising and marketing ability will eventually lead to the general improvement of its conversion efficiency, and the improvement of the advertiser's user experience on the head media can ultimately make a big leap in the income level of the head media, so we believe that this matter is a win-win situation.

At the same time, we have to be responsible for the marketing effect of advertisers, so we have to mention a very important level, we have successively united some more authoritative third-party monitoring platforms, in order to be more transparent, fairer and more objective in terms of display click download, effect feedback, financial accounting or data tracking, which is also what we insist on doing in the entire industry, and it is also one of our business values

Another point is that although the number of head media is not large, in fact, there are differences and competition between head media and head media, which may be reflected in the positioning of the media, the form of advertising space and different ways of combination.

In the actual process of overseas marketing, our clients will not specify the purchase of traffic from a certain head media, but will consider how to allocate it to different media in the best way based on the comprehensive advertising budget to achieve the best business results. This is not a problem that can be solved by a single media through the improvement of AI technology or the change of business model.

As an intelligent marketing service provider that has served 5000+ advertisers, we have fully possessed the strong ability to "dig deeper into a wider range of data", and focus on creative materials, placement management, The four cores of budget allocation and effect data have improved the business product line and AI layout, and completed the full-link coverage of overseas marketing to meet the differentiated needs of advertisers and help advertisers achieve satisfactory marketing goals.

At the level of effect optimization of big media, we are more likely to help overseas enterprises improve their ability to optimize on multiple platforms, improve the efficiency of enterprise products from generation to delivery, improve their product matrix, and complete continuous investment in technology research and development at the AI layout level to meet the increasingly refined marketing needs of advertisers and help advertisers better reduce costs, improve efficiency, and increase revenue, which is what we continue to do.

To put it simply, AI technology will greatly improve the overall delivery efficiency of the entire advertising and marketing market, thereby improving the overall production efficiency of society. It's a win-win for us, the media and the advertisers.

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