Recently, Zhiwen Group, which focuses on online social networking, released its financial report for the third quarter of 2023, with an overall stable revenue performance, but the growth rate has slowed down. From the perspective of its main business, Zhiwen has been deeply engaged in the online social track since the launch of Momo to the acquisition of Tantan. The social track, whether online or offline, whether it is focused on chat or games, is the core of people, that is, users.
However, with the emergence of more and more competitors on the social circuit, the pressure on Zhiwen has also increased. In the third quarter of this year, the paid users of the two apps Momo and Tantan that it mainly promoted declined, and Zhiwen, which was facing the loss of users, also went to a "fork in the road" of how to continue to move forward
Zhiwen's net profit in the third quarter increased by 21% year-on-year, thanks to the support of "who".
According to the financial report, the net revenue of Zhiwen Group in the third quarter of 2023 will reach 3042.8 billion yuan, down 59%。Specifically, Zhiwen's two major products, the net income of the Momo segment in the third quarter was 2743.1 billion yuan, a year-on-year decrease of 512%；The net income of the Tantan segment in the third quarter was 295 billion yuan, a year-on-year decrease of 152%；However, on the whole, the decline is not large, and the revenue is still in a stable state.
The decline in net revenue of Momo App and Tantan App was mainly due to the decrease in net revenue from value-added services and live streaming services, as well as the reduction of some marketing expenses by Zhiwen.
The source of the picture comes from the Internet.
In terms of segments, the revenue of live broadcast services in the third quarter was 1530.8 billion yuan, compared to 16.8 billion yuan in the same period in 202257.5 billion yuan, down 76%, according to the financial report, this decline is mainly due to the weak consumer sentiment in the current external environment.
At the same time, the paying users of Momo and Tantan also declined in the third quarter, which undoubtedly brought multiple pressures to Zhiwen. According to the financial report data, the total number of paid users of the Momo app in the third quarter of 2023 will be 7.8 million, a year-on-year decrease of 71%；The total number of paid users of the Tantan app was 1.4 million, a year-on-year decrease of 30%.
It is worth noting that the net profit of Zhiwen Group in the third quarter was significantly **, and the financial report data showed that the net profit attributable to Zhiwen Group was 605.9 billion yuan, a year-on-year increase of 21%.
Among them, Momo made a profit of 5 in the third quarter4.2 billion yuan, a year-on-year increase of 81%；Tantan also turned losses into profits, achieving a net profit of 23 million, a year-on-year increase of 1517%。
Separately, Momo's profit growth in the third quarter was mainly due to a decrease in the revenue share of anchors who provided live broadcast services, while the revenue share of recipients who received virtual gifts was also reducedTantan's turnaround is due to the strategy of reducing investment and controlling costs, which correspondingly reduces the marketing and promotion expenses of inefficient channels.
As a result, the overall cost of Zhiwen has been significantly reduced. According to the financial report, the costs and expenses of Zhiwen Group in the third quarter were 2461.1 billion yuan, up from 27.7 in the same period last year34.2 billion yuan, down 100%。
In the third quarter, although Zhiwen achieved a major breakthrough in net profit, the overall revenue did not increase, and Momo and Tantan in the subdivision segment were still facing the problem of reducing paying users. Therefore, in the long run, the strategy of reducing costs and increasing efficiency in the third quarter can only solve the temporary difficulties, and Zhiwen still needs to pave a longer road for itself.
Revenue growth is slowing down, can new apps open the "upward channel" of Zhiwen?
For a long time, Zhiwen Group has been known as "China's Tinder", and its Momo, Tantan and Soul are the most popular three-dating apps in China, and the total number of monthly active users of the three apps reached 1500 million. It can be seen that Zhiwen occupies a certain leading position in the social market.
However, from the perspective of the external environment, the social market is gradually segmented, especially the explosion of a number of vertical social software, which proves that seizing the market segment is an inevitable trend in the development of the social field.
In addition to Momo and Tantan on today's social platforms, new social apps such as Taqu, Miyi, and Xiaohongshu have risen in recent yearsThe rise of offline social board games, script killing, and frisbee is also promoting the diversification of social entertainment programs.
In the face of this market environment, Zhiwen has been developing diversified businesses and trying to create a new trump card in the market segment. Judging from the performance in the third quarter of this year, Zhiwen's new APP is worth looking forward to.
According to the financial report, despite the decline in revenue of its head software Momo and Tantan, the revenue growth of new independent applications Duidui, Hertz and Soulchill partially offset the decline, and the three applications brought a total of 2revenue of 9.5 billion yuan, a year-on-year increase of 45%.
Meanwhile, revenue from pairs, Hertz and Soulchill reached 20.3 billion yuan, accounting for 6% of the company's revenue, a year-on-year increase of 154%. It can be seen that the growth momentum of Zhiwen's new applications is booming.
According to Chief Financial Officer Peng Hui's analysis, these three new apps are expected to bring in revenue of 1.1 billion to 1.2 billion yuan this year, with a net profit of 100 million yuan, and the contribution to revenue may be as high as 10%.
Among the three apps, Soulchill and Hertz are voice chat social software launched by Zhiwen, Soulchill is for overseas markets such as the Middle East, Turkey, Southeast Asia and South America, and Hertz is for the domestic market. Similar to Tantan, it is also a first-class dating software, mainly for the domestic sinking market.
It is understood that the monthly turnover of soulchill has been equivalent to the sum of hertz and pairs, and the reason why soulchill's revenue data has continued to record growth, on the one hand, is because the development of global social ** platforms is uneven, although the global social media penetration rate has exceeded 58%, but the social media penetration rate in Africa, South America and other regions is significantly lower than that of Europe, which indicates that there is still a broad incremental space for social media software.
On the other hand, because Soulchill focuses on the concept of social metaverse for young people, it is known as the overseas version of Soul, which is committed to solving problems such as small user circles and difficulty in making friends. In this way, Soulchill broke into the overseas market, gaining more than 5 million followers in the early stages, which is a remarkable achievement.
The path to growth for the right person is "different". It mainly focuses on the marriage and love sinking market, and once it was launched in 20 years, it achieved breakeven in less than two years.
The rise of the pair has a lot to do with the current market situation. According to the China Statistical Yearbook (2022), as of 2021, the single population over the age of 15 in China is about 23.9 billion people. At the same time, China's marriage rate continues to decline, and there is a huge number of people who need marriage and love.
Especially single consumers in the sinking market, unlike the first- and second-tier single people, their lifestyles are different, and they have more leisure time and more disposable income, so they have a higher probability of successfully matching in the marriage and love market, and they are the target users of the marriage and dating platforms to tap first.
It can be seen that the momentum of Zhiwen's "high-speed running" is still there. However, due to the recent interference of the external environment of the market, it has been weak in stages.
This feature is clearer when viewed in terms of valuation. The market capitalization of Zhiwen Group is about 96With a price-to-earnings ratio of less than 6 times that of $3.4 billion, Match Group (MTCH.) is larger than its U.S. peerUS) is trading at a price-to-earnings ratio of up to 18x, and Bumble (BMBLUS) is even higher at 40 times. Therefore, the valuation of Zhiwen Group is likely to be undervalued.
And of the 16 analysts surveyed by Yahoo Finance, 15 gave it a rating of "**" or "strong**", and only one analyst rated it as "holding". This indicates that whether it is an analogy with peers in the industry or a rating of ginseng, Zhiwen still has a lot of room for growth.
Conclusion
In the third quarter, Zhiwen's revenue growth slowed down, but thanks to the strategy of reducing costs and increasing efficiency, its net profit increased significantly. Although Zhiwen's main apps Momo and Tantan have encountered phased bottlenecks in terms of user data, the social demand for strangers under Zhiwen's app is still growing steadily, which is undoubtedly good news for Zhiwen.
Coupled with the gradual segmentation of the social needs of strangers, the new apps launched by Zhiwen are in line with the current needs. In addition to creating a richer product matrix, Zhiwen can also find a subdivision track as the main battlefield, and the current achievements of "Right" and "Soulchill" also hint at the future growth space of Zhiwen, and Zhiwen may emerge in the subdivision track at any time.
Author: When the piano sounds.