Key points of investment:

Incident: The company released the “Double Improvement of Quality and Return” action plan, explaining various measures such as historical dividends, R&D investment, and deepening social responsibility, demonstrating confidence in the company's long-term development.

The basic model is stable, speed up the launch, and embrace AI. 1) The company's core product market share is leading. According to DiXian, 23H1, the brand share of the Sivo education market accounted for 43.5% of the total sales volume of the domestic IFPD education market, up 3.5% year on year; in 23H1, MAXHUB's domestic IFPD conference market sales market share increased to 28.5%; the machine business continued to maintain the leading edge of the domestic market share. 2) The company accelerates overseas business expansion and the establishment of a global ecosystem. Currently, MAXHUB has established strategic alliances with 16 software and hardware ecosystem partners around the world, including Microsoft, Zoom, and Intel. We have established global subsidiaries in the US, India, and the Netherlands, and established product, marketing and market localization teams in 18 countries and regions including Australia, the Middle East, Southeast Asia, Japan, South Korea, and Latin America. 3) Actively embrace the AI technology wave. The company launched the Shiva Teaching Model in October 2023 to further empower the digital transformation of education. Starting from teachers' needs, the Shivo teaching model empowers software and hardware terminals such as the “Hivo 7th Generation Interactive Smart Tablet” and the software platform “Shivo Classroom Intelligent Feedback System”. By being equipped with localized computing power, it realizes functions such as automatic courseware generation, preparation and discussion, intelligent classroom feedback, academic analysis, and homework correction, and integrates AI capabilities before, during, and after class to solve the actual needs of multiple teaching scenarios.

Pay attention to shareholder returns, and active repurchases show confidence. 1) Since its listing, the company has carried out stable and sustainable cash dividends in strict accordance with the profit distribution policy set out in the “Articles of Association”. From 2020 to 2022, the company's cash dividend amount remained stable at over 35% of net profit attributable to shareholders of listed companies for the year. 2) The company announced the “Proposal on the Company's Share Repurchase Plan” in September 2023. The repurchase amount is between RMB 1-2 billion. After the launch of the plan, the company actively implemented repurchases. As of January 31, 2024, the company had repurchased a total of 3,493,600 shares, accounting for 0.50% of the company's current total share capital, and the total transaction amount was about 146 million yuan (excluding transaction fees).

Maintain a “buy” rating. Referring to the company's FY23 performance report, considering that it will take time for demand for complete machines to recover, and due to factors such as overseas expansion, the cost rate is expected to increase. According to the comprehensive downward profit forecast, net profit attributable to mother is expected to be achieved in 23-25 million yuan (previously estimated at 21.53 billion 26/3,016 billion yuan), and the current price corresponding to PE in 23-25 is 20/17/13X, respectively. According to Wind, the company's PE-band range for the past five years was [12, 43]. The average PE for the past two years was 23 times, and the current valuation is at an historically low level. Considering the company's stable basic market business position, accelerated deployment to overseas, and actively embracing AI, we are optimistic about the company's long-term development prospects and maintain a “buy” rating.

Risk warning: 1) fluctuations in upstream raw material prices; 2) macroeconomic sentiment; 3) changes in export tax rebate policies.