HONG KONG,Aug. 22,2024 -- Marketingforce (02556.HK) has released its interim results report for the six months ended June 30,2024. The company achieved total revenue of RMB 740 million in the first half,marking a year-on-year growth of 26.7%,continuing its consistent growth over the past five years.

Marketingforce's business is divided into two main segments: SaaS and precision marketing. The SaaS segment generated revenue of RMB 400 million,accounting for 54% of total revenue,with a year-on-year increase of 30.4%. The gross profit margin of the SaaS segment reached 88.3%,a year-on-year increase of 1.2 percentage points.

The precision marketing segment,which accounts for 46% of total revenue,generated RMB 340 million in revenue in the first half,representing a year-on-year growth of 22.6%. The gross revenue from precision marketing services reached RMB 3.374 billion,up by 11% year-on-year.

The overall performance in the first half was solid,but notably,through refined operations and ecosystem partnerships,the company successfully achieved half-year profitability,with an adjusted net profit of RMB 47.68 million,compared to an adjusted net loss of RMB 24.16 million in the same period last year.

The accounting net loss of RMB 820 million in the report does not reflect the true operational condition of the company and is due to changes in the fair value of preferred shares before the IPO. Since the IPO valuation was much higher than the entry price for preferred shareholders,the substantial profit realized by preferred shareholders must be recorded as a loss for the listed company in accounting terms. However,this loss is unrelated to the company's operations and,instead,proves that the company's value is recognized by the market,demonstrating the foresight of the investors. In contrast,the adjusted net profit of RMB 47.68 million better reflects the company's true operating performance.

According to a report by Frost & Sullivan,Marketingforce was the largest provider of marketing and sales SaaS solutions in China in 2023 by revenue and has held the top market share in China's marketing and sales SaaS solution market for two consecutive years. The company received numerous industry accolades in the first half of the year,such as being ranked first on the AI SaaS list for five consecutive years,topping the intelligent marketing rankings for four consecutive years,and being recognized among the Top 100 Software and Information Technology Service Enterprises in Shanghai for six consecutive years.

From a product and technology perspective,(1) Marketingforce currently offers 240 standard modules that can be flexibly combined and sold,enhancing its ability to meet customers' personalized needs and facilitating upselling,which is a key factor in maintaining high gross margins while driving revenue growth; (2) Marketingforce's technology portfolio covers AI applications in market insights,content generation,precision targeting,intelligent strategies,shopping assistants,and smart customer service,improving customer acquisition effectiveness and operational efficiency; (3) Marketingforce will continue to pursue its AI strategy,aiming to achieve AI integration across its entire SaaS product portfolio,while also increasing investment in building a PaaS open platform.

From a customer perspective,(1) The number of paying users for the SaaS business reached 22,247,with average monthly revenue per user increasing by 16.5% year-on-year; (2) Marketingforce is following a dual-track development curve focusing on both small and medium-sized business (SMB) customers and large key account (KA) customers,with balanced profit contributions from both segments. The company maintains a leading position in the SMB market,and its large customer strategy has shown initial success; (3) In the second half of the year,the company will further deepen its large customer strategy,and the expansion of its product matrix is expected to continue driving revenue growth from large customers.

Chairman Zhao Xulong stated at the interim results conference that the company will further expand into overseas markets in the future,increase overseas business lines,and enhance product standardization capabilities to quickly meet customer customization needs,improve delivery speed,reduce delivery costs,and continue to strengthen the company's position in the marketing and sales SaaS solution market.

Dan Xue

xuedan@zhenzhuo.com