Why YOUDAO Is a Compelling Buy & What Fuels Its Business Model
1. Business Model – Multi‑Pronged & AI‑Driven
Three core segments: Learning Services, Smart Devices, Online Marketing Services
It's AI Subscriptions: A standout growth driver. AI‑powered services such as Youdao Dictionary and Interpreter subscriptions generated over RMB 200 million in sales in 2024—a 130% year-over-year leap + its SpaceOne dictionary pen
Technological Innovation with “AI Native” Strategy:
Youdao is embedding AI deeply across its offerings, leveraging proprietary large language models (Ziyue, DeepSeek‑R1) to power tutoring, translation, smart devices, and ad automation
2. Why is it compelling?
First ever full year profitabitliy in 2024; strong retention metrics and "stick ability" In product suites, diversified revenue streams, strong backer-- NETEASE is the parent company.
More importantly, we saw how Duolingo has soared today, I think as part of the ripple effect, it will also benefit in the short term...
Long term wise, I like it for the potential listed above.
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