Recently, Quantum Song (NASDAQ: QSG) released its financial report for the first quarter of fiscal year 2025 (referred to as the "first quarter of fiscal year 2025", referring to the period from July 1, 2024 to September 30, 2024), with a total revenue of 810 million yuan for this fiscal quarter; The net profit reached 80.69 million yuan, a year-on-year increase of 21.0%.
In addition, as of the end of September 2024, the total number of registered users of Quantum Song has reached 135 million, a year-on-year increase of 30.2%; The number of paying users increased by 16.8% year-on-year. The quality of user growth and user stickiness of Quantum Song have both improved, showing a good development trend of "both quantity and quality".
In the era of material abundance, the pursuit of countrymen people has quietly sublimated from the desire for material to the exploration of the spiritual world, which is also an important background for the high-quality growth of the users of Quantum Song. As this trend continues to deepen, the song of quantum will also achieve greater growth.
Expanding demand for silver hair drives product first business model upgrade
At present, the continuous growth of Quantum Song is the result of market demand and policy promotion. According to statistics, by the end of 2023, the population of elderly people aged 60 and above in China has reached 297 million, accounting for 21.1% of the total population. In this context, China's silver economy continues to expand. According to estimates, the current scale of China's silver economy is around 7 trillion yuan, accounting for approximately 6% of GDP. By 2035, the scale of the silver economy is expected to reach around 30 trillion yuan, with enormous potential.
In addition, as of 2023, the size of China's silver education market has reached approximately 25.61 billion yuan. It is expected that by 2028, the size of China's silver education market will reach 42.96 billion yuan, which means that the market will grow at a compound annual growth rate of about 10.9% from 2023 to 2028.
More noteworthy is that the government is also continuously promoting the high-quality development of the silver economy. In early November this year, 24 departments including the Ministry of Civil Affairs, the Ministry of Commerce, and the National Development and Reform Commission issued the "Several Measures to Further Promote the Consumption of Elderly Care Services and Improve the Quality of Life of the Elderly" (hereinafter referred to as the "Several Measures"), which requires further effective exploration of the consumption potential of elderly care services, promoting the coordinated development of the elderly care industry and the elderly care industry, achieving high-quality development of elderly care services, and better meeting the multi-level, diversified, and personalized service needs of the elderly.
In the face of market demand and policy promotion, Quantum Song is also continuously upgrading its service level and updating its business model. Based on changes in user needs, Quantum Song's exploration of services for the "silver economy" has gone through three stages. Starting from providing basic online interest education services, it has gradually developed into a service model that meets the personalized and diversified needs of middle-aged and elderly people, and is forming a comprehensive product service ecosystem that integrates online and offline services.
As the company gradually shifts from a traffic driven business model to a more product focused business model, it is expected that its sales and marketing costs will gradually improve. This will also allow the company to focus on measures that directly support the silver economy, while gradually reducing the scale of investment in non core areas. By emphasizing cost management in this way, the company's profitability may be further enhanced.
High quality growth in user base and increasingly evident brand effect
In fact, the high-quality growth of Quantum Song users is due to its continuous deep cultivation and precise layout in the silver economy field. The silver haired population, as the core target user group of Quantum Song, is becoming an important engine driving the company's user growth.
Currently, the silver haired population has a strong demand for comprehensive services. Surveys show that over 80% of the silver haired population has already participated in interest based learning, while over 66% of those who have not yet participated hope to participate in related learning. This indicates that the silver haired population has a strong demand for comprehensive services such as learning, culture, and health, providing a broad space for Quantum Song to establish a sustainable competitive advantage in the silver haired economy market.
The "online+offline" integrated service model explored by Quantum Song precisely meets the needs of the silver haired population. Online: Launching calligraphy master classes, nurturing eight dan brocade courses, etc., to help the silver haired population deeply learn the essence of traditional culture and improve their health literacy. Offline: Promote the layout of regional elderly care service centers, create a comprehensive service space integrating learning, health care, and socializing, and develop offline learning projects such as Jingdezhen and Wudangshan to enrich the experience of the silver haired population.
Quantum Song has not only achieved steady growth in user base, but more importantly, it continues to enhance user stickiness through community activities and social interactions. For example, Quantum Song is planning an offline "Elderly Care School" project, which aims to provide a comprehensive service space for learning, health care, and social interaction for the elderly through an integrated online and offline approach. This model not only meets users' social needs, but also increases their sense of participation and belonging through community activities. In addition, Quantum Song provides personalized product and service recommendations through AI models and user demand insights, enhancing user interaction experience and satisfaction.
The high-quality products and services of Quantum Song have won recognition and praise from a large number of users, and the user reputation effect is gradually emerging. More and more users are joining the Quantum Song family through word-of-mouth and social media recommendations, providing strong support for the continuous growth of the company's user base.
Continuously cultivating the silver economy and building a sustainable development ecosystem
Li Peng, founder and chairman of Quantum Song Group, stated that "the company will continuously expand its service boundaries through technological innovation and refined services, meet the growing spiritual and cultural needs of the silver haired population, and continuously empower the high-quality development of the silver haired economy." To meet the diverse and high-quality needs of silver haired users, Quantum Song explores the panoramic silver haired ecosystem through the "learning, traveling, and nurturing" three in one service.
In terms of "learning", we will construct curriculum modules such as culture and art, health preservation, and life skills, and create a comprehensive and multi-level learning and growth platform; In terms of tourism, from ancient capital culture to ecological health, we aim to create an educational and entertaining learning experience; In terms of "maintenance", traceable health products that integrate technology and traditional wisdom have been launched to improve the quality of life of elderly people, broaden income sources, and enhance profitability. During the reporting period, thanks to the continuous launch of silver hair health products, the group's consumer business revenue increased to 49.5 million yuan, and the revenue structure showed an optimized trend.
Meanwhile, Quantum Song is actively exploring new offline service scenarios by leveraging its existing advantages. Through the light asset model, plan to establish community senior schools in key locations such as regional elderly care service centers and community elderly care service stations, and promote the layout of comprehensive elderly care service centers throughout Beijing.
Adequate cash reserves will also provide a solid guarantee for the company's continued investment and innovation in the silver economy in the future. As of the end of September 2024, the company's cash reserves reached 1.194 billion yuan, an increase of 16.3% compared to the end of June this year. Adequate cash reserves have also laid the foundation for announcing a special dividend this quarter. The company announced its first special cash dividend plan in October, distributing $0.201 per ADS, and is currently completing its first special dividend of $11 million after going public. This not only reflects the stability of the company's financial strength, but also demonstrates the company's determination to actively repay shareholders.
With the continuous growth of the silver economy and the sustained release of policy dividends, Quantum Song is ushering in unprecedented development opportunities. Its transformation from a traffic driven business model to a product driven one, as well as the construction of a panoramic silver hair ecosystem of "learning, traveling, and nurturing", not only precisely meets the needs of the silver hair population, but also lays a solid foundation for its long-term sustainable development. The Song of Quantum is expected to create greater social and commercial value in the silver economy, achieving a win-win situation between economic and social benefits.