Momo.com Earnings: Investment Thesis Intact as Revenue Better Than Expected, but Competition Remains

We maintain our fair value estimate of TWD 495 per share for momo.com after it reported first-quarter 2024 revenue of TWD 26.9 billion, representing a 7% increase year on year, which was higher than our estimate of 4% growth and on pace to surpass company guidance of 4%. While we are encouraged that e-commerce demand recovered better than expected, we would like to see the positive trend continue for longer, hence we are not materially changing our forecast assumptions. The better-than-expected results were driven by an increase in beauty and healthcare purchases. This led to a 3% decline in the average ticket size to TWD 1,973, but was more than offset by the 11% increase in transactions. We believe this highlights a shift in strategy for momo.com as it moves away from larger-ticket items and toward younger customers.