The revenue side is gradually recovering, and the profit side is under short-term pressure.
Hanwang Science and Technology released three quarterly reports that in 2023, Q1-Q3 achieved revenue of 973 million yuan (yoy+5.04%), net profit of-89.85 million yuan (yoy-98.32%) and deduction of non-net profit of-89.19 million yuan (yoy-86.04%).
Among them, Q3 realized revenue of 352 million yuan (yoy+5.64%,qoq+12.44%) and net profit of-37.99 million yuan (yoy-13259.32%,qoq-73.11%). The short-term pressure on the profit side is due to the company's R & D investment in innovative technology, products, AI and so on, as well as an increase in new product listing market investment. We estimate that the EPS of the company from 2023 to 2025 is 0.13,0.45,0.53 yuan respectively. Comparable company's 24-year Wind unanimously expected the average PE to be 57.2 times, giving the company 57.2 times PE in 24 years, with a target price of 25.74 yuan (the previous value was 34.13 yuan), maintaining a "buy" rating.
Continue to increase R & D efforts, AI+ capacity or further improve market competitiveness 23Q1-Q3 gross profit margin / net profit rate is 41.54% Maxima 12.46%, year-on-year change-1.37/-5.90pct, net profit rate goes down more than gross profit margin, mainly because the expense rate during the period is higher than the same period last year:
The rate of sales / management / R & D expenses of 23Q1-Q3 is 28.76%, 9.83% and 16.95% respectively, which is a year-on-year change in 1.13/-0.57/2.53pct. The company continues to adhere to technology investment, R & D expenditure of 165 million yuan, an increase of 23.47% over the same period last year. We believe that the company will closely follow the development trend of AI, increase investment in new products and new technologies, continue to polish and improve the rich product pedigree with AI+ text recognition ability as the core and covering a variety of intelligent terminals, and its market competitiveness is expected to be further improved.
The product matrix is continuously improved and actively adapted to Hongmeng ecology.
The company's product matrix continues to iterate, covering olfactory recognition, digital health, digital office & learning, home entertainment, digital security and handheld intelligent APP and other product lines, software and hardware layout is perfect. The scan pen T500 was launched in August to synchronize the scan information on the screen and edit it. In addition, the company formally signed the Hongmeng ecological cooperation memorandum in August, and Hanwang handwritten approval of intelligent terminal equipment successfully adapted to the scanners and high-racket applications developed by HarmonyOS,HarmonyOS also smoothly docked Hanwang's OCR recognition core. We believe that with the in-depth docking between the company and Hongmeng Ecology, it is expected to benefit from Hongmeng Ecology's deep user base to further iterate product technology and expand coverage.
The big model is officially released, landing AI e-paper to learn this product
The Hanwang Heaven and Earth model has nine basic capabilities, such as multimodal, semantic understanding, logical reasoning, mathematical calculation, knowledge search, etc., and is applied to office, ancient Chinese, law, education, medical care and other industries. In addition, 1) the company has empowered the Hanwang model technology to learn this S10, to intelligently distinguish the learning situation, to provide customized chemistry training content, and to set up a customized advanced plan. 2) winning the bid "Hebei Financial Cloud" project to set a benchmark and tree model for the company to build AI+ embedded business services in the industry. We believe that, on the one hand, the company actively embraces AI large model technology, on the other hand, it has successfully applied the large model to end products and industry projects, which is expected to continue to improve product strength and achieve revenue growth.
Risk hint: downstream demand is lower than expected and production progress is lower than expected.