Investment events: Recently, the company announced its 2024 interim results. In 2024 H1, the company achieved operating income of 1.321 billion yuan, up 6.3% year on year; adjusted net profit was 0.197 billion yuan, down 13% year on year.

Revenue grew steadily, and the BaaS business performed well. In 2024 H1, the company achieved revenue of 1.321 billion yuan, a year-on-year increase of 6.3%. By business, the company's model as a service (MaaS) revenue reached 0.421 billion yuan, a year-on-year decline of 2%. The MaaS business actively expanded fields and implemented scenarios in various fields such as e-commerce and human resources. The company's business-as-a-service (BaaS) revenue reached 0.9 billion yuan, up 11% year on year. Among them, BaaS-financial cloud revenue was 0.589 billion yuan, up 20% year on year. During the reporting period, the financial industry cloud asset transaction scale reached 26.15 billion yuan, up 23% year on year; BaaS-insurance industry cloud revenue was 0.311 billion yuan, down 3% year on year.

The gross margin remains high, and the focus is on AI technology research and development. 2024H1, the company's gross margin was 73.19%, up 1.11% from the same period last year. At the cost level, the company's sales/management/R&D expenses were 0.507 billion yuan/0.14 billion/ 0.226 billion yuan respectively, up 10%/12.9%/11.9% from the same period last year. Currently, the company's research and development mainly focuses on AI application technology, algorithm-driven machine learning platforms, and improving the performance of the underlying database.

Improved product performance and 3D digital human layout. In the first half of the year, the company successfully combined intelligent voice applications with large models, reducing the interaction response time based on the large model to 500 ms, which is far below the industry average. At the same time, through independent research and development, the company added emotional recognition and emotional voice output capabilities to the large intelligent voice model. The company has a 3D digital human layout and has developed the first commercial version. It is expected to be used in various application scenarios such as bank lobby reception and retail department store shopping guides in the future.

Investment advice: According to the company's 2024 mid-year report, and the growth rate of fintech investment is slowing down, we will adjust 2024 and 2025, and add a profit forecast for 2026. It is predicted that the company's revenue for 2024-2026 will be 2.955/3.288/3.693 billion yuan (3.142 billion yuan/3.675 billion yuan in 2024-2025, respectively), and net profit will be 0.305/0.398/0.478 billion yuan, respectively (0.398 billion yuan/0.479 billion yuan in 2024-2025, respectively), corresponding PE will be maintained 8 times 12/9/8 times, respectively.” “Buy” rating.

Risk warning events: business development falls short of expectations, slow policy progress, untimely data updates, etc.