Bank of America Securities raises WEIMOB INC's target price to 2.7 yuan and reiterates a "Neutral" rating

Bank of America Securities released a report indicating that Weimob (02013.HK) saw a mid-term revenue decline of 11% to RMB 775 million, in line with market expectations. On a non-GAAP basis, it turned a profit, with an adjusted net profit of RMB 17 million, an improvement from a loss of RMB 187 million in the same period last year, also exceeding the market and the bank's expectation of a loss of over RMB 100 million, benefiting from improved gross profit margin and effective cost control. Management aims for a non-GAAP breakeven in the current fiscal year.

The bank raised its adjusted net profit forecasts for the company to RMB 34 million, RMB 101 million, and RMB 190 million for this year through 2027, and increased the target price from HKD 2.4 to HKD 2.7. The target market-to-sales ratio for the company's Software as a Service (SaaS) was raised from 5 times to 6 times, based on the improvement in profitability in that segment. The bank reiterated a "Neutral" rating on Weimob, noting that the recovery of SaaS business revenue may take time