Incident: The company released its 2024 mid-year report, with revenue of 3.805 billion yuan, an increase of 12.9% over the previous year; net profit to mother - 0.794 billion yuan.

Cloud revenue is growing rapidly, and midsize customers are performing well. In the first half of 2024, the company's enterprise customer revenue was 3.443 billion yuan, up 11.8% year on year: of which large enterprise revenue was 2.388 billion yuan, up 11.2% year on year, cloud revenue was 1.765 billion yuan, up 16.8% year on year; medium enterprise revenue was 0.6 billion yuan, up 8.3% year on year; cloud revenue was 0.429 billion yuan, up 39.1% year on year; small and micro enterprise revenue was 0.456 billion yuan, up 20.4% year on year Cloud subscription revenue was 0.309 billion yuan, up 35.3% year over year. Government and other public organization customer revenue was 0.284 billion yuan, up 13.1% year over year, and cloud revenue was 0.217 billion yuan, up 25.8% year over year.

Product and AI fusion polishing. The company's product YonSuite for growing enterprises accelerates the application of AI. Based on the YongPT model, it has launched multiple intelligent services in the fields of collaboration, cost control, etc., and launched many new products and scenarios in the fields of finance and procurement management. The application scenarios of corporate YongPT have been further expanded and deepened. The intelligent product “Smart Friend” enables various intelligent scenarios such as knowledge questioning, application evocation, ChatBI reports, and approval process prediction.

Cloud financial metrics continue to improve. As of the first half of 2024, the company's subscription related contract debt was 1.95 billion yuan, up 33.8% from the end of the first half of last year, accounting for 68.6% of total contract debt; the ARR of the company's cloud service business was 2.33 billion yuan, up 13.1% from the end of the first half of last year. YonBIP's revenue increased 42.1% year over year, and the renewal rate was 101.1%. YonSuite's revenue increased 116.1% year over year, and the renewal rate continued to rise to 92.4%.

Investment advice: The company will increase its investment and continue to firmly transform the cloud. The company's EPS is expected to be 0.06\ 0.13\ 0.24 yuan in 2024-2026, respectively, maintaining a “buy” rating.

Risk warning: Cloud transformation falls short of expectations; industry competition intensifies.