The company's revenue in both the 23Q4 and 24Q1 quarters grew rapidly year-on-year, and there was a marked acceleration. The three-year rate was reduced by 15 pcts in '23, which highlighted the results of optimizing operating costs. The company actively embraces AIGC. Large model products have been successfully implemented in many industries, and orders for AI Infra related products have exceeded 54 million yuan in 23 years.
Incident: The company released the 2023 annual report and the first quarter report for 2024. It achieved operating income of 491 million yuan, YoY +31.72%; realized net profit attributable to mother - 288 million yuan, YoY -6.23%; realized net profit withheld from non-mother - 335 million yuan, YoY -7.88%; achieved net operating cash flow of 365 million yuan, YoY -21.83%. 23Q4 achieved revenue of 268 million yuan in a single quarter, YoY +33.14%; realized net profit of -20 million yuan, YoY +57.42%; realized net profit without deduction of -38 million yuan, YoY +37.35%. In a single quarter, 24Q1 achieved operating income of 63 million yuan, YoY +46.00%; realized net profit of 0.89 million yuan, YoY -3.77%; realized net profit without deduction to mother of -93 million yuan, YoY +4.57%.
Performance has increased significantly, and the results of optimizing operating costs have been outstanding. The company's revenue in both the 23Q4 and 24Q1 quarters grew rapidly year on year, and there was a marked acceleration. The main reason was that confirmed revenue customers increased 12.5% year over year to 578 in 23, and the increase in the number of high-value customers with confirmed revenue amounts greater than 1 million led to a significant increase in average customer unit prices. The company's gross margin increased by 3.08pct to 59.61% year-on-year in '23, mainly due to the active focus on high-value, high-margin software licensing business. In terms of expenses, the company's sales/management/R&D expenses in '23 were 53.50%/25.66%/45.45%, respectively. The year-on-year change was -1.58/-6.90/ -6.61 pct. The total cost rate decreased by 15.09 pct year on year, and the cost control effect was remarkable.
Actively embrace AIGC, and large model products have been successfully implemented in many industries. The company actively embraces the technological changes brought about by the introduction of big models, and is committed to providing customers with richer AI Infra basic software products, releasing innovative products such as the distributed vector database Hippo, the large model pre-training/fine-tuning tool Sophon LLMOps, the enterprise-level vertical domain question-and-answer model “Endless”, and “Quest”, a large data analysis model derived from it. “Endless Life” and “Quest” have all been registered through the National Internet Information Office's deep synthesis service algorithm, and “Infinity” has passed the National Internet Information Office's generative artificial intelligence service Filing. By the end of 2023, orders for Big Model Era AI Infra related products provided by the company exceeded 54 million yuan, and had achieved successful commercial implementation in various industries such as finance, government, energy, telecommunications, construction and real estate, and manufacturing, with positive market feedback.
Maintain an “no rating” investment rating. The company is a pioneer in big data platforms. Products such as distributed databases and big models have leading technological advantages, and will benefit from the accelerated development of data elements and big models. The company's net profit for 24-26 is estimated to be -1.84/0.16/114 million yuan, maintaining an “unrated” investment rating.
Risk warning: Industry competition intensifies, policies fall short of expectations, product innovation falls short of expectations.