Everbright Securities has released a research report indicating that WEIMOB INC (02013) has shown signs of stabilization following adjustments in its SaaS business. In terms of merchant solutions, the company has reduced low-margin businesses such as TSO and financial services, actively adjusting the client structure for its advertising business. Considering the incremental partnership with Douyin, the revenue forecasts for 2025 remain unchanged, while the 2026-2027 revenue forecasts have been slightly revised upwards to RMB 1.79 billion and RMB 2.00 billion (an increase of 3% and 6%, respectively), thus maintaining a "Buy" rating.

The group has announced a business cooperation with Douyin Group's comprehensive digital marketing service platform, Douyin Engine, becoming its integrated advertising business agency and obtaining the Douyin Qianchuan service provider license. Key points from Everbright Securities include: 1) The collaboration with Douyin will enable WEIMOB to provide integrated solutions for brand merchants across multiple platforms, including Toutiao, Douyin, Xigua Video, Faceu, and Qingyan, driving long-term stable growth in marketing business revenues and profits. In 2021, advertising spending through Douyin reached approximately RMB 3 billion, and this reinitiation is expected to bring considerable growth in merchant solutions revenue in 2026. 2) Leveraging WEIMOB's leading digital business technology, vast brand merchant resources, and deep customer service experience, the company is poised to assist more merchants in achieving smart operations across various business directions, including digital marketing, local life, AI, Douyin Mall, and Feishu.

Outlook on company fundamentals: 1) For merchant solutions: The firm anticipates that the company's gross advertising income for 2025 will be about RMB 17 billion, a slight decline year-on-year due to the company's proactive elimination of low-quality clients and optimization of client structure. The gross income from Tencent channels is expected to increase further in 2026, and with the added contribution from Douyin channels, the firm estimates gross advertising revenue could surpass RMB 20 billion in 2026. Regarding rebate differentials, the company is actively reducing downstream rebate rates, with the net rebate increasing from 2.1% in the same period last year to 3.85% for the first half of 2025, marking a 1.7 percentage point rise. The firm believes the rebate differential will remain steady or increase, with the revenue and profit growth of merchant solutions expected to exceed that of gross revenue growth. 2) In terms of the SaaS business: Signs of stabilization are evident, and positive growth is expected to resume in 2026. Revenue growth is expected to stem from 340 million yuan generated from AI-related products in the first half of 2025, with further increases anticipated. The company plans to expand into local life sectors such as the pet industry and home-to-store scenes, introducing more industry-specific solutions to enhance smart retail-related income. WEIMOB's mini-programs have also integrated with Douyin, Meituan, connecting the coupon system while also interfacing with Xiaohongshu and Alipay, with further deepening of each ecosystem planned.

WEIMOB has received international long-term investment of USD 200 million, continuing to ramp up on AI. On September 18, the company announced a subscription agreement with a well-known international long-term investment institution, Infini Capital, successfully raising USD 200 million. This round of financing will primarily be used for three key areas: first, the integration and application of AI in SaaS to upgrade AI technology infrastructure for enhanced computing and storage capacity, accelerating the in-depth application of AI technology in retail and e-commerce; second, expanding media channels and precise marketing service capabilities to deepen its ecological layout on platforms like Douyin and Xiaohongshu; and third, actively promoting overseas business development by investing in companies with AI innovative models and corresponding products to strategically enter the cross-border market.