The end side is an important scenario for AI implementation. The company recently released the PC version of Wuya Knowledge AI, and personal intelligence has achieved commercial implementation. The company actively focuses on high-value, high-margin software licensing business. Profitability is expected to continue to improve and maintain an increase in holdings rating.
Key points to support ratings
The end-side model was deployed at an accelerated pace, and the PC version of Wuyazhi AI was released. End-side AI can run on various devices such as smartphones and wearables, and is an important scenario for AI implementation. In March '24, the company and Intel released the PC version of Wuyawanzhi AI, opening a new era of large-scale personal intelligence applications. The PC version of Wuya Knowledge AI is based on an integrated graphics card and NPU. Combined with Starlink Technology's large model and multi-modal data processing technology, it can implement functions such as intelligent Q&A, news information, and writing assistant.
The full chain layout of the product has the advantage of core card slots. The company has products such as the distributed vector database Transwarp Hippo and the big end-side model Wuya Knowledge, etc., which have formed a comprehensive product layout.
The vector database has efficient similarity search and matching capabilities, and enables large end-side models to quickly extract key information from massive data, thereby improving model retrieval efficiency. The Star Ring vector database has a leading edge. When combined with the company's large model, it can effectively reduce the illusion of the big model, form a product synergy advantage, and have a core card position advantage.
Focus on high-value businesses, and gross margin continues to rise. In '23, the company achieved total revenue of 491 million yuan, a year-on-year increase of 31.72%, mainly due to an increase in its basic software orders. The company actively focused on high-value, high-margin software licensing business, and the gross margin increased to 59.6% in 2023, an increase of 3.1 pcts compared to the same period last year. In 2023, the company's net profit to mother was 288 million yuan, and losses increased 6.23% year-on-year, mainly due to increased investment in R&D and sales. Q1 revenue in 2024 was 62.7342 million yuan, up 46.0% year on year; gross margin continued to rise to 69.3%, up 17.7 pcts year over year.
valuations
Net profit due to mother for 24-26 is estimated to be -1.37, 0.01, and 0.77 million yuan, EPS is -1.14, 0.01, and 0.63 yuan (considering the base of the company's 23-year performance, the net profit for 24 was reduced by 32.6%), and the corresponding PS is 6.8X, 5.2X, and 4.1X, respectively. The company's end-side model was implemented, gross margin continued to rise, and the shareholding rating was maintained.
The main risks faced by ratings
Customer expansion fell short of expectations; technology development fell short of expectations.