Introduction to this report:
Affected by insufficient customer demand under market fluctuations and cost increases brought about by increased investment, 2024Q1's net profit declined. Recently, the company's AI-related products have continued to be launched, which is expected to enable the main business to grow and maintain an “gain” rating in the future.
Key points of investment:
Maintaining the “Overweight” rating, the 2024 valuation was 59xPE, and the target price was maintained at 178.24 yuan.
The company achieved revenue of 619 million yuan, +1.47% yoy, net profit of 104 million yuan, and -15.03% yoy in 2024Q1. The company's performance was in line with expectations. The company maintained its 24-26 EPS forecast of 3.02/3.52/4.21 yuan, giving the company 59 x PE for 24 years, with a corresponding target price of 178.24 yuan, maintaining the company's “gain” rating.
Insufficient customer demand under market fluctuations and cost increases due to increased investment are the main reasons why 2024Q1 results are under pressure. Net cash flow from operating activities - 50 million yuan (76 million in the same period in 2023), reflects a decrease in sales receipts, mainly due to weak C-side business performance and insufficient user demand due to capital market fluctuations. On the cost and expense side, on the one hand, due to the need to expand sales staff and increase data procurement efforts due to B-side business development, on the other hand, R&D personnel and computing power investment increased due to the acceleration of the application of large AI models. Sales and R&D expenses in the first quarter were +27.8%/+7.6%, respectively.
The AI model is advancing at an accelerated pace, and it is expected to fully enable the growth of the main business in the future. The Tonghuashun HiThinkGPT large model algorithm has been registered through the fourth batch of deep synthesis service algorithms. Currently, related large model products have been applied in the Tonghuashun App and iFind financial terminals. Empowered by the AI model, China's intelligent investment and investment and research market is expected to benefit from increased customer willingness to pay and grow rapidly. As an industry leader, the company continues to increase investment in AI-related R&D, and is expected to gain a high market share through data and algorithm advantages.
Catalyst: Will the company launch more AI model products and upgraded products based on AI technology? Risk warning: The capital market fluctuates sharply, and the commercialization progress of the company's AI big model falls short of expectations