Vobile's revenue in 2022 was in line with our expectation, outperforming Bloomberg's consensus estimate of 6.4%. Revenue from subscription services and revenue from value-added services achieved YoY growth of 167% and 94%, respectively, totaYoY revenue growth of 108% in 2022. Vobile's gross profit reached HK$590 mn in 2022 with gross margin of 41%. With operating expenses to revenue ratio decreasing from 49% in 2021 to 30% in 2022, Vobile successfully turned loss into profit, achieving net profit attributable to shareholders of HK$42 mn in 2022.
The Company's business in China achieved explosive growth, and the revenue scale of its China and overseas business is currently almost equal. In 2022, revenue from Vobile's Chinese business reached HK$700 mn, a YoY increase of 320% compared to HK$170 mn in 2021. Excluding Particle Technology's business in China, Vobile achieved 64% YoY growth in China in 2022. The reasons for Vobile's growth in China was attributable to not only the completion of the integration of Particle Technology's business, but also the scaling of its new protection business modein China by empowering content platforms through its APIs implemented in 2021 and its assistance to Chinese content rights holders in exporting content overseas.
We believe that the Company's overseas business is poised to exceed market expectations. It is generally believed that the Company already covers almost alof the top content rights holders in overseas markets, making it difficult to further increase the number of clients and revenue from overseas. However, we believe that although Vobile's content protection and SaaS subscription services already covers most of the world's leading film and TV content holders, with the rapid development in the streaming media industry, overseas film and TV content copyrights are increasingly being infringed, especially on sociamedia platforms. Based on its core technology, Vobile has diversified applications for monetization as it continues to develop its covered content assets. Therefore, there is stilsignificant potentiafor Vobile to expand its value-added business in content protection in terms of breadth and depth.
Maintain current target price of HK$5.79 and "Buy" rating. We adopt relative valuation based on price-to-sales ratio. According to Bloomberg, the peers group's 2023 PS ratio ranges from 1.9x to 6.7x, with a weighted average PS of 5.1X. Based on Vobile's huge potentiaroom for growth and leading profitability in the SaaS industry, we assign a 2023 PS of 5.9x for its valuation.
Risk: Low customer acceptance of newly developed protection services; slower-than-expected development of content protection awareness in China.