$MetaLight Inc.(02605.HK)
1. METALIGHT is essentially an advertising company
The company relies on the "Che Lai Le" app as its advertising platform, achieving mobile advertising revenue of 202 million yuan in 2024, accounting for 98.02% of total revenue. The company's overall gross margin level is 76.38%, with advertising mainly sourced from companies such as Tencent, Douyin, Baidu, and Alibaba.
According to the prospectus, the company is the third-largest public transport information service provider in China. The top two are speculated to be Baidu Maps and AutoNavi Maps. The market shares of the top three are 20.4%, 12.4%, and 9.6%, respectively.
2. Financial Analysis
The company's revenue growth has fluctuated, with year-on-year revenue growth of -17.17%, 28.92%, and 18.11% in 2022, 2023, and 2024, respectively.
Due to the existence of preferred shares, there may be an impact on our understanding of the financial statements. The adjusted net profits from 2022 to 2024 were 9.0046 million yuan, 42.6606 million yuan, and 49.7476 million yuan (all converted to RMB), respectively. The company's adjusted net profit margin in 2024 was approximately 24%.
3. Valuation as an Advertising Company
In terms of comparable companies, some believe METALIGHT is a time-series data service or big data service company. Based on its 98.02% revenue share from advertising and considering that "Che Lai Le" is the company's advertising platform, I personally tend to classify it as an advertising company but will give it a slightly higher valuation than the industry average due to its data analysis capabilities.
Among A-share listed advertising companies, Focus Media and Lansheng Co., Ltd. have similar net profit margins, with an average PE of around 20x. In Hong Kong, China Vision Media Group has a PE of around 11x.
Based on this calculation, as of the end of 2024, the company's reasonable stock price per share is estimated to be between 3.87 HKD and 7.03 HKD, with a preference for the 6-7 HKD range. As we are now in June 2025, the price per share can be considered for a slight increase.
The above is only my calculation and is for reference only.
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