The performance was in line with expectations, and the maximum net profit to mother was 83 million yuan

The company issued the “2023 Annual Results Pre-Profit Notice” on January 30. According to preliminary estimates by the company's finance department, it is expected to achieve net profit of 65.0 million yuan to 83.0 million yuan in 2023, turning a loss into a profit compared with the same period of the previous year; it is expected to achieve net profit of 41.5 million yuan to 59.50 million yuan in 2023, turning a loss into a profit compared to the same period last year. The main reason for the net profit loss was that the company continued to increase R&D investment in information fields such as large artificial intelligence models, and formed technological products such as innovative new knowledge platforms. In terms of business, through steady expansion and layout of segments such as the financial industry and the corporate service industry, it is estimated that revenue will exceed 160,000 yuan.

To strengthen AI product research and development, the Xinzhi Xinzhi 2.0 architecture was officially released. The company actively invested in AI product layout in 2023. The press conference “New Frontier, New Touch New Knowledge 2.0” hosted on December 28 was successfully held in Shanghai. The live launch focused on showcasing the latest views and strategic overall layout of Xinzhi Xinzhi AI 2.0 products and innovative software on the enterprise's “digital intelligence” transformation. The comprehensive upgrade of the Xinzhi Xinjiao 2.0 platform supports Agent and RAG through an open smart market, a virtuous cycle of data assets, and a native AI application platform, providing strong support for scenario exploration, while broadening the breadth of services with diverse docking capabilities. Based on the difficulties and pain points of the enterprise's “digital intelligence” transformation, the company joined hands with ecological partners such as Huawei, Baidu, Baichuan, Inspur, and Xinghuan to build a new and innovative knowledge platform, and has pioneered the implementation of many products in the banking, insurance, automobile, retail and other industries.

Join hands with Huawei to expand the all-in-one insurance market

The company cooperated deeply with Huawei to jointly release the large model “Shengteng” all-in-one computer. It is based on domestic AI computing power and pre-installed with various mainstream large models. Through a full-scenario implementation method of private cloud, public cloud, and exclusive cloud, it can provide integrated computing power with general purpose and AI for thousands of industries. In July 2023, at the WAIC conference, Huawei and four partners jointly released an integrated solution for large-scale model training and promotion. Combining Shengteng AI's basic software and hardware capabilities, partner models, and the advantages of an integrated training and promotion platform, it provides industry customers with an “out-of-the-box” integrated large model solution through joint design, joint development, collaborative listing, and continuous iteration to reshape the big model development process.

Xinzhi has released a vertical industry all-in-one product based on Shengteng AI, which will help solve the insurance industry's large-scale model implementation needs and open up a wider market space.

Investment advice and profit forecasting

The company's 2023-2025 EPS is expected to be 0.29, 0.38, and 0.55 yuan, respectively. The PE corresponding to the current stock price is 51.01, 38.15, and 26.36 times, respectively. The company is a leading domestic insurance IT solution provider. It is actively exploring the combination of big models and insurance industry applications, and is expected to start a second growth curve and maintain a “buy” rating.

Risk warning:

AI technology iterations fall short of expectations; demand for insurance IT falls short of expectations; market competition intensifies, etc.