On August 30th,阜博集团（SEHK：3738）announced its interim financial report, with comprehensive growth in performance data that stands out particularly in the current market environment, fully demonstrating the company's strong fundamentals and strategic foresight. In the first half of 2024, the company's revenue was 1.18 billion Hong Kong dollars, a year-on-year increase of 18%; gross profit was 500 million Hong Kong dollars, a significant year-on-year increase of 28%; net profit was 46.32 million Hong Kong dollars, a substantial year-on-year increase of 37%. Adjusted EBITDA for the year was approximately 200 million Hong Kong dollars, a year-on-year increase of 8%.
It is worth noting that the company's high-quality development strategy, which began in 2023, has achieved significant results. In the second half of 2023, the company's revenue was 1 billion Hong Kong dollars, equal to the first half of the year. After a brief half-year adjustment, the company's strong revenue growth quickly recovered, with a sequential increase of 18% in the first half of 2024. According to this trend, it is expected that the annual revenue will steadily exceed the milestone of 2.5 billion Hong Kong dollars.
From a regional business perspective, there is no sign of slowing down in the growth momentum of the business in the U.S. market, with revenue of about 570 million Hong Kong dollars, a year-on-year increase of 30%. On the other hand, while actively deploying in the field of China's digital cultural trade, the business in the Chinese market continues to grow rapidly, achieving revenue of 600 million Hong Kong dollars, a year-on-year increase of 8%.
The emergence of ChatGPT in 2022 once led some investment professionals to believe that the copyright was no longer needed in the AI era. Entering 2024, the number of infringement lawsuits filed by copyright content parties against AI technology companies has significantly increased. The rapidly developing AI large model platform urgently needs to solve copyright issues. The investment community has recognized that the value of copyright will be more important than ever in the AIGC era, and the market has reached a consensus that data and copyright content need to be legally authorized for use. From recent market signs,阜博 is moving out of the bottom shape, with a cumulative increase of 32% in 13 trading days. Some keen investors have already smelled the huge value potential contained in the company.
1. Profitability has been greatly improved, and the industry's copyright consensus has accelerated the company's AIGC strategic layout.
From the financial report,阜博 Group has continued its consistent high-growth trend, with a compound annual growth rate of over 70% in the past three years. In the first half of 2024, the company's gross profit was 500 million Hong Kong dollars, a year-on-year increase of 28%; net profit was 46.32 million Hong Kong dollars, a year-on-year increase of 37%; adjusted EBITDA was 200 million Hong Kong dollars, a year-on-year increase of 8%.
Through unremitting technological upgrades and service category expansion,阜博 continues to open up business space. In the first half of 2024,阜博 further achieved full-category copyright content service coverage, especially in new content areas such as music, micro-short dramas, and e-commerce, with a focus on development. Subscription service revenue reached 550 million Hong Kong dollars, a year-on-year increase of about 17%, accounting for about 46% of total revenue. Based on content protection,阜博 continuously helps customers maximize the value of content through a variety of value-added services. During the performance period, the revenue from value-added services reached 640 million Hong Kong dollars, a year-on-year increase of 19%, accounting for about 54% of total revenue. It is worth noting that in the first half of the year,阜博's content views on YouTube Shorts have significantly increased, and the company has developed an innovative product system for micro-short drama content.
The rapid improvement in profitability is due to the company's rhythmic adjustment of low-profit businesses on the one hand, highlighting阜博 Group's determination and effectiveness in pursuing high-quality development. On the other hand, it also lies in the balanced development between the company's existing businesses and new technology investments. The company continues to increase investment in high-gross-margin and promising businesses, which not only brings innovative momentum to existing businesses and increases profit growth space but also lays a solid foundation for its long-term growth.
While maintaining the growth of existing business scale and core technology advantages,阜博 Group actively deploys in the AI field. As the industry forms a consensus on the importance of copyright in AI development, a clear copyright framework and interest distribution mechanism have become the foundation for supporting the sustainable development of AIGC, creating an opportunity for阜博 to explode in growth. In the era of accelerated development of AIGC,阜博's core capabilities will be directly applied to new AIGC business scenarios, and its importance in the industry chain will be raised to an unprecedented height.Based on its leading AI technology layout and systematic services,阜博 will cover various important aspects of the digital content ecosystem in the AIGC era. While ensuring that copyrighted content is reasonably measured and fairly rewarded,阜博 will also provide services to large model parties to reduce copyright disputes and legal litigation risks, and offer transaction services for generated content.
On the other hand,阜博 is facing an important opportunity to upgrade from a tool-based service to a platform-based service role. In the past, due to the cost of acquiring customers and the limited scale of content created by small and medium-sized content creators,阜博's services mainly focused on large B-end customers. With the maturity of technologies such as AIGC and Web3,阜博 will achieve comprehensive coverage of small B-end and C-end customers. By building a platform ecosystem,阜博's scaled customer acquisition and services will promote the company's service scale to a new level, enhancing the company's influence and market share in the content industry. The expansion of the service range and the surge in copyright demand brought about by AI-stimulated enthusiasm among small and medium-sized content creators form an organic resonance, opening up greater growth space for阜博.
2. Deeply participate in regional digital economy construction, create a digital trade ecosystem to welcome a new era of growth
Under the background of the global development of the digital economy, data has become a new type of production factor, and its value is accelerating.
阜博 has the world's largest film and television content gene library authorized by copyright owners and is continuously expanding. Based on its profound service experience and channel and data accumulation,阜博 has built a complete data management infrastructure and has the service capability to monetize on a global content platform, establishing a leading advantage in the field of digital cultural trade.
From the company's demonstrated capabilities, it will also strive to build a cross-regional interconnection platform to achieve free and full circulation of digital content assets worldwide. With the continuous improvement of digital content trading infrastructure, content creators will have more diverse and efficient monetization options. Lower-cost rights confirmation mechanisms and more detailed benefit distribution systems will also greatly promote the liquidity and commercial monetization capabilities of high-quality content, thereby supporting the sustainable development of the content creation ecosystem.阜博 will also achieve its own large-scale leapfrog growth in the process of playing an industrial infrastructure role and promoting the construction of a multi-win pattern behind the scenes.
Currently, the company has established in-depth cooperation with many top universities, continuously strengthening global technology research and development and reserves. Data shows that阜博 has further strengthened cooperation with the University of Florida, Zhejiang University, and the Hong Kong University of Science and Technology, and the company's diversified watermark technology solutions are ready for commercial application. In the first half of the year,阜博 Group founder Wang Yangbin was selected into the first Hall of Fame of Electrical and Computer Engineering at the University of Florida, also reflecting the company's leading achievements.
It is worth mentioning that阜博 is also communicating and cooperating with the world's leading chip and platform companies to jointly address the increasingly complex copyright challenges in the AIGC field.
It can be said that whether it is the vigorous development of AIGC or the unstoppable momentum of the digital economy,阜博 is full of vitality at present, which is not only reflected in the company's current performance realization ability but also highlighted in the new round of explosive growth that阜博 is brewing. There is no doubt that阜博's subsequent growth will be full of highlights.
3. ConclusionIn the current environment where the Federal Reserve's interest rate cuts are helping to heat up the Hong Kong stock market, market attention to technology stocks is gradually increasing. Under the continuous improvement of the market atmosphere, more opportunities have been brought to the future performance of阜博Group.
Looking at the valuation of current AI concept stocks, companies with significant influence and market recognition in the AI field generally enjoy higher PS valuations. The leading representative Nvidia's PS has approached 40 times, and the PS given to AI-related companies in Hong Kong stocks and A shares is basically above 5 times. In contrast,阜博's current PS is only 1.74 times, which is obviously underestimated. It can be seen that the market has not fully recognized the true value of the company, but there is still reason to believe that excellent companies will never be forgotten by the market, and the return and leap of the company's valuation may only be a matter of time.
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