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Public company info - Joy Spreader Group Inc. , 06988.HK
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Joy Spreader Group Inc., 06988.HK - Company Profile
Chairman Zhu Zinan
Share Issued (share) 2,185,000,000
Par Currency Hong Kong Dollar
Par Value 1.0E-5
Industry Advertising
Corporate Profile Business Summary: The group is a performance-based we-media (自媒體) marketing service provider in China. Performance for the year: The revenue of the Group increased by 71.73% from HK$538.00 million in 2019 to HK$923.92 million in 2020. Business Review: With the development of the mobile internet ecological environment and marketing technology, the performance-based marketing, which features with strengths of accuracy and high cost efficiency, is becoming the major option of marketers to conduct product marketing and promotion, and the market demand keeps on growing. As the leading mobile new media performance-based marketing technology company in China, the Group has possessed the first-class marketing performance and technology standard in the industry, and accumulated a number of the most popular current mobile new media content resources (including WeChat official accounts and video channels, and Douyin) through abundant of product reserves and efficient marketing SaaS service capability, thus favored by many marketers. In 2020, the Group has achieved a delightful performance in both business segment of the performance-based marketing and marketing SaaS services. Performance-based Marketing Services The marketers and the number of their product in the Group’s performancebased marketing service have significantly increased in 2020. As at December 31, 2020, the marketers of the Group’s performance-based marketing service covers approximately 20 industries, amounting up to 276. In respect of interactive entertainment products, there were up to 209 game products recorded in the Group’s product library as at December 31, 2020, an addition of 65 as compared with that of December 31, 2019. Online literature products amounted to 1,111 books across 84 genres, increasing 529 books and 17 genres, respectively, as compared with that of December 31, 2019. In respect of e-commerce products, the e-commerce consumer goods included in the Group’s product library were up to 183 items, an addition of 91 as compared with 92 types as of December 31, 2019, and the product category is expanding from electronic products towards more variety of consumer goods, including daily care and cosmetic products. E-commerce product performance-based marketing is one of the fastest growing business segments and key drivers in the 2020 annual results of the Group. The proportion of revenue from e-commerce product marketing to the total revenue of the Group increased from 4.86% in 2019 to 12.85% in 2020. As revenue from e-commerce product marketing is recognized on a net basis, its contribution to the Group’s gross profit is much greater than that of revenue. In 2020, the gross profit of e-commerce product performance-based marketing accounted for 31.50% of total gross profit of the Group, representing an increase of 15.75 percentage points as compared with 15.75% of 2019 (or the proportion was doubled). Interactive Entertainment and Other Digital Product Performance-based Marketing Services In 2020, with the increase in the number of customers and product of interactive entertainment and other digital product marketing, together with the rising of ARPU value, the Group’s scale of business was boosted rapidly. In addition, the epidemic prevention and control measures in 2020 provided a growth opportunity for online recreational industry, including games, online literature and live broadcasting. Owing to the reinforcement of the user habits of interactive entertainment and other digital products, more online products consisted of mobile applications and mini programs came into the market, which also drove the demand of online performance-based marketing service. In 2020, the Group recorded revenue of HK$803.53 million from interactive entertainment and other digital product performance-based marketing service, representing an increase of 57.64% as compared with HK$509.72 million of the same period last year, of which the game products realized revenue of HK$435.18 million, representing 2.13 times of HK$204.66 million in 2019; online literature products realized revenue of HK$152.71 million, representing 2.27 times of HK$67.19 million in 2019 E-commerce Product Performance-based Marketing Service The video e-commerce industry continued to grow remarkably in 2020, becoming an important channel for e-commerce product distribution. Due to the early business layout in the field of video e-commerce product marketing and the accumulation of relevant data and model algorithm, the Group began to take shape in conducting non-live e-commerce marketing business over video platform which revealed the potential of rapid growth. The e-commerce product GMV of HK$594 million was achieved through the Group’s performance-based marketing services, representing an increase of 353.92% as compared with HK$131 million in 2019. As the revenue from the Group’s e-commerce product performance-based marketing services was recognized on a net basis, revenue of HK$118.73 million was recorded in 2020, representing 4.54 times of HK$26.16 million in 2019. Marketing SaaS Service The Group began to provide mobile new media publishers with marketing SaaS monetization service in 2013. With the development of SaaS platform, the Group provided the interface to content publishers, helping them to access the Group’s product library. The Group also recommended the product portfolios to their subscribers by using interestbased recommendation technology, and ultimately helped the content publishers to realize traffic monetization. Currently, the content publishers have not been charged in respect of SaaS services and the revenue sharing was obtained via the process of traffic monetization. The position of the Group’s marketing SaaS services is to obtain the content resources and user behaviors data quickly and automatically, as well as to improve the model algorithm, which in turn promote the Group’s marketing efficiency and effectiveness and ultimately improve the Group’s profitability. As of December 31, 2020, the Group’s marketing SaaS service customers (mobile new media resource library) comprised a total of 40,890 WeChat official accounts, representing 1.83 times of that of December 31, 2019. A total of 21,771 Douyin accounts, representing 10.50 times of that of December 31, 2019. Additionally, the Group has started to arrange WeChat video channels (such function available at the WeChat platform in 2020) marketing services, and 8,763 WeChat video channels were added in 2020. As of December 31, 2020, the Group has cooperated with 469,968 mobile new media marketing access points, representing an increase of 106.06% as compared with that of December 31, 2019. Progress on Research & Development The development expenditure of the Group mainly consist of data acquisition and algorithm modeling. The investment in R&D of performance-based marketing and marketing SaaS business based on WeChat official accounts was started in 2013, and the data and model algorithm accumulated at present is relatively mature, thus the iterative spending in every year can be managed at a lower level. In light of the emerging of video-related business opportunities and the rapid growth of its business scale, the Group in recent years began to increase the development investment year by year in respect of data collection, data disaggregation and algorithm modeling of video content. The Group recorded research and development expenses of HK$27.37 million in 2020, of which data development expenses of HK$20.10 million and algorithm research and development expenses of HK$7.27 million, representing an increase of 254.08% as compared with HK$7.73 million in 2019. The Group is committed to establish competitive advantage on algorithm-based big data. As of December 31, 2020, anonymous users behaviors data in the Group’s database amounted up to 1.9 billion, increasing 0.55 billion as compared with that of December 31, 2019. The data models based on various product categories amounted to 148 sets as of December 31, 2020, representing an increase of 35.78% as compared with 109 sets as of December 31, 2019. Data labels adopted by intelligent recommendation coupling model was 1,923, representing an increase of 38.15% as compared with 1,392 as of December 31, 2019. The expansion of data scale and enhancement of algorithm capability have made a solid foundation for the improvement of the Company’s marketing business and further increasing the number of marketers and marketing SaaS customers. Progress on Private Domain Traffic Expansion The deployment in private domain traffic (i.e. 1P traffic) is one of the major strategies in the Group’s business development. The Group strives to nurture content publishers who are highly cooperative with us in marketing business by means of strategic cooperation, investment and incubation. Through mutual empowering, the Group will form private domain with the highest level of response among the content reserves of the Group, in order to achieve the tailor-made content production for key marketers and their products, significantly improving their marketing conversion effects. On December 25, 2020, the Group and Cowin Capital, a professional private equity investment institution, made investments of RMB5 million and RMB15 million respectively in Yingyi, a company specialized in video content production. After the investment, Yingyi was valued at RMB160 million as recognized by all parties. As the first institutional investor of Yingyi, the Group made the first strategical investment in Yingyi in December 2018, after which Yingyi was valued at RMB30 million. Yingyi is a platform company within video industry. With a lot of Key Opinion Leaders (KOL) and its own Professional Generated Content (PGC) traffic, it can provide smart commercial services to new media content publishers, and continuously accumulate its own traffic through specialized, segmented and smart PGC content production. It now ranks first in the List of Life Creativity – A Segment of Douyin (抖音細分領域生活創意類榜單) and has obtained the PGC certification from the leading platforms in the industry. As at December 31, 2020, it has over 90 million followers. Prospects: Expansion of SaaS Services The Group will continue to optimize SaaS marketing platform and its services and actively expand the customer number of mobile new media marketing SaaS in order to reserve more enriched and diversified content traffic resources for the Group’s performance-based marketing business. The Group will attach importance to the layout in the mobile new media platforms that already opened or may open eco-traffic systems in the future, including but not limited to WeChat, Douyin, TikTok, Bilibili, Xiao Hong Shu, with a focus on developing marketing SaaS customer resources, and continue to expand the accumulation of WeChat video channels. Expansion of Video E-commerce The Group will continue to increase efforts in developing the businesses with high addedvalue such as video e-commerce. In recent years, the rapid development of video platform has made it become the potential largest internet traffic entry points. As platforms such as Douyin, TikTok and WeChat video channels account thrive, the future of e-commerce marketing business based on video content is very promising. The Group is among the first batch of companies investing in the sector of video marketing and has equipped with first mover advantages. In the future, the Group will strengthen the Group’s ability in delivering video e-commerce marketing services so as to provide video content publishers and product manufacturers with more accurate and efficient performance-based marketing services. The Group will explore more product categories and continue to expand into new categories suitable for mobile video new media marketing while consolidating the existing product marketing service capabilities in order to enrich the Company’s performance-based marketing products and services matrix. Expansion of Businesses in Overseas The Group has started to focus on the establishment of a global mobile new media marketing services system to expand its mobile new media performance-based marketing services and marketing SaaS services into the overseas market by the internationalization of mobile internet platforms of the PRC. The Group believe that the Chinese internet platforms including WeChat and TikTok have huge numbers of active users in overseas, therefore they are of very high commercial values. The Group intends to carry on cross-border e-commerce business and interactive entertainment products distribution business on the mobile internet overseas platforms of the PRC, promoting the PRC’s leading performance-based marketing business and marketing SaaS business based on data algorithm and interest recommendation technologies. Driving Private Domain (1P) Traffic and Enhancing Profitability As part of the Group’s business development strategy, the Group intend to continue to promote the Group’s private domain traffic, and nurture content publishers who can be highly with us in marketing business by means of strategic partnership, investment and incubation. Through mutual empowering, the Group will form the Group’s own traffic with the highest level of response among the content pools of the Group, in order to achieve the tailor-made content production for key marketers and their products, significantly improving their marketing conversion effects. Data Algorithm Platform and R&D Investments As a technology-driven company with data and algorithm as its core capacity, the Group plan to continue the iteration and perfection of the smart automatic transaction matching system (智能自動化交易撮合系統) and technology platform, in a bid to build an industry-leading service system of mobile new media performance-based marketing and marketing SaaS. The Group will consolidate the Group’s core competitiveness, optimize the marketing effect through technical capabilities, expand business scale, increase market share and further strengthen the Group’s leading position in the industry. As the emerging of video-related business opportunities and the rapid expansion of business scale, the Group will gradually increase its R&D investments in data collection, data sorting and algorithm modeling. It will make pre-deployment of R&D for the business expansion in overseas markets in order to accumulate technological reserves for the Group’s performance-based marketing business and marketing SaaS business in advance.

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