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Public company info - Netjoy Holdings Limited , 02131.HK
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Netjoy Holdings Limited, 02131.HK - Company Profile
Chairman Xu Jiaqing
Share Issued (share) 800,000,000
Par Currency U.S. Dollar
Par Value 5.0E-5
Industry Advertising
Corporate Profile Business Summary: The group is a leading short video marketing solutions provider and an online content services provider focusing on pan-entertainment in China. Performance for the year: During the Track Record Period, the group’s revenue increased significantly from RMB235.4 million in 2017 to RMB2,313.0 million in 2019, representing a CAGR of 213.5%. the group’s profit for the year increased from RMB33.0 million in 2017 to RMB72.9 million in 2019, representing a CAGR of 48.6%. Business Review According to iResearch, the short video marketing market is an important component and driver of the overall online marketing market, with a market share of 15.9% in terms of revenue in 2019. the group contributed to approximately 0.5% of the total revenue of the overall online marketing market in China in 2019. According to iResearch, the group were the third largest online marketing solutions provider in China in terms of gross billing generated from short video advertisements in 2019, with a market share of 3.4%. In particular, according to iResearch, in terms of user traffic consumption of the advertisements of e-commerce merchants that sell products or services directly through short video platforms, the group were the largest short video marketing solutions provider in the PRC in 2019, with user traffic consumption of more than RMB1.0 billion. the group also operate a pan-entertainment-oriented content platform through the group’s Huabian website and its mobile terminal, presenting attention catching pan-entertainment articles and photos to internet users. In addition, the group produce quality and appealing content for audiences and advertisers, such as short videos, movie and television stars interview programs and entertainment news programs. the group act as a middleman connecting advertising customers and media partners. During the Track Record Period, Supplier A was the group’s single largest supplier. The group is one of the 100 to 250 online marketing solutions providers that had contractual relationship with Supplier A in 2019. the group’s gross billing generated through Supplier A’s content distribution platforms accounted for approximately 37.7%, 85.2%, 87.1% and 84.8% of the group’s total gross billing in 2017, 2018 and 2019 and the six months ended June 30, 2020. the group deliver the group’s online marketing solutions primarily through top online publishers in China, such as Douyin (抖音), Huoshan (抖音火山版), Xigua Video (西瓜視頻) and Kuaishou (快手). The group generate revenue primarily from providing (i) online marketing solutions to advertisers and advertising agencies, including user traffic acquisition, ad creatives production, and ad performance optimization; and (ii) advertising spaces on the group’s Huabian Platform to ad networks and advertisers. the group charge the group’s advertising customers for the group’s online marketing solutions primarily measured by a mix of oCPM (optimized cost per mille), oCPC (optimized cost per click) and CPC, while the group acquire user traffic from the group’s media partners to place the group’s advertisements online and pay traffic acquisition costs based primarily on the same mechanism. Media partners may grant to us rebates primarily calculated based on the group’s gross spending. the group may also grant rebates to the group’s advertising customers from time to time calculated based on their gross spending to incentivize them to continue to use the group’s solutions. In addition, during the Track Record Period, the group charged ad networks primarily based on CPM, and charged advertisers primarily based on CPT or CPA, for the advertising spaces the group provided on the group’s Huabian Platform. the group also began to generate revenue from providing product placement opportunities in the group’s short video KOL programs for advertisers to market their products or services since January 2020. The group have experienced rapid growth since 2017 benefiting from the rise of short videos. During the Track Record Period, the group’s revenue increased significantly from RMB235.4 million in 2017 to RMB2,313.0 million in 2019, representing a CAGR of 213.5%. the group’s profit for the year increased from RMB33.0 million in 2017 to RMB72.9 million in 2019, representing a CAGR of 48.6%. In particular, the group’s gross billing generated from short video marketing solutions accounted for approximately 14.5%, 73.5%, 87.1% and 89.2% of the group’s total gross billing generated from online marketing solutions business in 2017, 2018, 2019 and the six months ended June 30, 2020, respectively. Given the technological development of network infrastructure and the continually reduced mobile internet traffic costs per GB that collectively led to the speedy growth of short video audience base, the group have strategically shifted the group’s focus to online marketing solutions (in particular short video marketing) from which the revenue accounted for approximately 70.4%, 94.5%, 98.7% and 98.9%, respectively, of the group’s total revenue for the years ended December 31, 2017, 2018 and 2019 and the six months ended June 30, 2020. Launched in 2013, the group’s online marketing solutions help the group’s advertising customers acquire high quality traffic from top online publishers, produce appealing and attention catching ad creatives to attract target consumers, and optimize campaign performance leveraging the group’s big data analytics and AI capabilities, to improve the marketing efficiency for the group’s advertisers. Launched in 2012, the group’s self-operated content platform, Huabian Platform, aggregates pan-entertainment articles and photos from professional media, talent agencies and self-media accounts, and presents real-time customized and popular feeds to visitors. the group also have another two short video KOL programs, Idol Answers and Hippie Entertainment, featuring latest television and movie star interviews and entertainment news, to expand the group’s pan-entertainment coverage. The group’s content production capability is one of the group’s core competencies that differentiate us from the group’s competitors. the group’s in-house content production team, consisting primarily of scriptwriters, directors and post-production crew, is able to produce customized, appealing and attention catching ad creatives, with the capacity to produce approximately 4,400 pieces of short videos each month. Leveraging the group’s strong content production capability, the group have established a cross-media multi-channel full service content platform, covering content production, exchange and distribution that connects directly the advertisers with internet users, content providers and content distribution channels, to (i) produce original content, particularly short videos, for advertisers; (ii) facilitate content exchange between the advertisers and content providers; and (iii) distribute content to internet users through online publishers. The group have maintained well-established relationships with various top online publishers, including the six largest short video platforms in China, such as Douyin, Kuaishou, Xigua Video, Huoshan and Tencent Weishi (騰訊微視), as well as other leading content distribution platforms, including Xiaohongshu (小紅書) and Qutoutiao (趣頭條). In particular, the group have a stable and cooperative partnership with Supplier A’s major content distribution platforms, including Douyin, Xigua Video, Huoshan and Toutiao. The group is Supplier A’s early collaborator and began to acquire user traffic from its content distribution platforms in 2016. The group is also one of the early online marketing solutions providers to offer short video marketing solutions through Douyin after it was launched in September 2016. The group serve a fast-growing and diversified advertiser base operating in a wide array of industry verticals, including online gaming, financial services, e-commerce, internet services, advertising and culture & media. As of June 30, 2020, the group had accumulated approximately 1,587 advertisers that have contractual relationship with us. Such direct advertisers for both online marketing solutions business and pan-entertainment content services business increased from 558 in 2017 to 669 in 2019, representing a CAGR of 9.5%, while the average spending per direct advertiser increased from RMB0.5 million in 2017 to RMB3.4 million in 2019, representing a CAGR of 160.8%. As a technology-driven company, the group have developed the group’s proprietary DMP to support internal advertising campaign management system as well as content management and distribution system through big data analytics and AI technologies. the group’s proprietary DMP collects and stores a wide variety of raw data on a real-time basis from online publishers, including ad performance data and behavioral data, to generate accurate user profiling modules and continuously monitor and analyze such data to optimize ad campaign performance to acquire, convert and retain consumers in a more effective and efficient way. Prospects: The group plan to implement the following strategies: • Strengthen and deepen the group’s collaboration with top online publishers and diversify the group’s media partner base • Expand the group’s advertising customer base and explore opportunities in specific industry verticals • Continue to unleash the monetization potential of the group’s content production, exchange and distribution platform that offers full cycle services • Enhance the group’s big data analytics and AI capabilities • Selectively pursue strategic collaboration, investment and acquisition opportunities

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