FY23 results were largely in line, with rev +18% YoY and profit at US$19.1mn (in line with our estimate but 9% above consensus). Mintegral rev remained resilient at +19.5% YoY in 4Q23. For 2024E, we see high visibility for Mobvista to enhance its profitability (forecasting bottom line at US$37mn, net margin at 2.9%), with solid topline growth (forecasting +20% YoY). We expect midcore and hardcore games’ momentum to continue. Intelligent bidding system upgrade should benefit effectively category expansion (e.g., non-game), and ROAS system should bring upside in the long run, if executed well. We lift our earnings forecast in FY24/25E by 10%. Maintain BUY with SOTP-based TP at HK$6.0 (32x/26x FY24/25E P/E, with a 21% earnings CAGR in FY24-26E).
　　In-line FY23 with improving margin. Mobvista reported in-line FY23 results, with rev +18% YoY, 1%/2% below our estimate/consensus. Adj.net profit reached US$19.1mn (+97% YoY), in line with our estimate but 9% above consensus. GPM improved to 20.6% in FY23 (+0.8ppt YoY, vs. our estimate of 20%), mainly on higher ads efficiency and cost discipline. By segment, ad-tech/mar-tech revenue rose 17.8%/23.9% YoY in FY23.
　　Resilient growth with category expansion and upgraded system. In 4Q23, Mintegral rev grew 19.5% YoY, with relatively stable publisher & customer retention rate. By app category, midcore and hardcore games rev surged 66.3% YoY, with the share of rev climbing up to 29.1% in FY23 (vs. 20.8% in FY22). Lifestyle segment saw robust growth, with rev +143% YoY. By geography, EMEA and Americas still serve as the largest rev contributor (46% share) with highest growth (+25.6% YoY), boosted by large client expansion in EMEA and further penetration among SMEs. China market stayed relatively resilient, with rev growth at +15.1% YoY. Looking ahead, we expect FY24E rev +20% YoY, with intelligent bidding system upgrade potentially helping to expand categories (e.g. ecommerce).
　　Better margin outlook. We remain positive on Mobvista’s LT margin outlook, with narrowing loss of Mar-tech, lower traffic incentives to publishers and higher productivity. Adj. NM improved to 1.8% in FY23 (vs. 1.1% in FY22), and we forecast this number to climb up to 2.9%/3.0% in FY24/25E. In FY24E, we expect organic biz to generate >US$50mn in profit, while Mar- tech’s loss should continuously narrow.
　　Maintain BUY. We slightly raise FY24/25E earnings forecast by 10%, with an unchanged TP at HK$6.0 (by assigning 20x FY24E P/E to ad-tech biz and 3.0x FY24E P/S to mar-tech biz).