Innovation Qizhi released its semi-annual report for 2023: The company released its 2023 semi-annual report. During the reporting period, the company achieved revenue of 92 million yuan, a year-on-year increase of 43.1%, net profit of 200 million yuan, a year-on-year reduction of 14.8% in losses, an adjusted net profit of 40 million yuan, and a year-on-year reduction of 33.4% in losses.
Innovative Qizhi launches generative AI platform AinNoGC: The company focuses on publishing a large industrial model (AinNo-15b) with 15+ billion parameters, a large model service engine, and three generative AI application products based on the big model — the “Qizhimingda ChatRobot” generative industrial robot task orchestration application, the “QizhimingDigital ChatBI” generative enterprise private domain data analysis application, and the “Qizhimingrui ChatDoc” generative enterprise private domain knowledge question and answer application.
Our point of view:
Overall performance was impressive. Revenue grew rapidly, net loss narrowed 2023H1 year on year, and the company achieved revenue of 92 billion yuan, maintaining rapid growth, mainly due to the company's continuous expansion of manufacturing and financial services business. The increase in gross margin was mainly due to the company gradually achieving economies of scale, gaining stronger pricing power and providing more standardized products and solutions; net profit was -200 million yuan, loss narrowed 14.8% year on year, adjusted net profit was -40 million yuan, loss narrowed by 33.4% year on year, mainly due to increased gross margin and cost ratio improvements.
“AI+ manufacturing” is the anchor, deeply involved in multiple vertical segments of 2023H1. “AI+ manufacturing” achieved revenue of 6.1 billion yuan, an increase of 81.3% over the previous year, and a revenue share of 66.1%. This is mainly due to the company's continuous implementation of the “focus” strategy, increased investment in the manufacturing industry, implementation of specialized and new development routes, and continued cultivation in vertical fields such as iron and steel metallurgy, panel semiconductors, 3C high-tech, engineering and construction. Explore and implement more AI application scenarios.
The generative AI platform Qizhi Kong Ming AinNoGC was released. Continuously Empowering Intelligent Manufacturing Qizhi Kong Ming AinNoGC is a generative AI platform with the 15 billion-plus parameter industrial model AINNO-15B developed by the innovative Qizhi as the core. It includes three generative AI application products based on the big model — the “Qizhimingda ChatRobot” generative industrial robot control platform, the “Qizhimingsu ChatBI” generative data analysis platform, and the “Qizhimingrui ChatDoc” generative document question and answer platform. The platform will target many fields in the manufacturing industry and enable solutions to be implemented.
Profit forecasts and investment ratings Considering that the overall economic environment is showing a slow recovery trend, we expect the company's 2023E/2024E/2025E revenue to be 21.8/34.9/5.23 billion yuan respectively, and net profit attributable to -3.2/-1.4/320 million yuan respectively. The corresponding P/S is 3.5/2.2/1.5x. Considering the company's superior position in the AI+ manufacturing field and the new generative AI platform that is expected to contribute new revenue growth, we maintain the “buy” rating.
Risk indicates increased competition in the industry; AI+ manufacturing business development falls short of expectations; company gross margin growth falls short of expectations; the company continues to lose money and cash flow is under pressure; and implementation of AI platform applications falls short of expectations.