The company is a leader in text recognition AI applications, and its business covers office scenarios at both ends of BC. The company was founded in 2006 in Shanghai. AI and big data are the company's products and technology genes. The company's C-end products are mainly app products for individual users around the world, including Scan Almighty King, Business Card Almighty King, and Qi Xinbao. B-side products are mainly intelligent text recognition and commercial big data products and services for customers in various industries.

The company's C-side products have covered 100 million users in more than 100 countries and regions around the world, and B-side services have covered enterprise customers in nearly 30 industries. The company's performance has grown rapidly in recent years. The company's revenue in 2023 was 1.187 billion yuan, up 20.04% year over year. The compound revenue growth rate in 20-23 was over 27%; net profit not attributable to mother was 0.297 billion yuan, an increase of 12.15% over the previous year. The compound growth rate of net profit after deduction of non-return to mother in 20-23 was over 45%.

Intelligent text recognition technology is leading, and the payment rate of the Omnipotent Scanning King continues to rise. Intelligent image processing, complex scene text recognition, and NLP are the three core technologies of the company's intelligent text recognition. The company scans Almighty King products ahead of their peers in multiple tests, which is one of the main criteria for customer selection. As a result, Scanning Master ranks first in the world in scanning applications, and is far ahead of competitors in terms of number of users. In 2023, Scanning Almighty Wang's product revenue reached 0.809 billion yuan, accounting for more than 68% of the company's annual revenue. The compound product growth rate in 2020-2023 was over 34%. The number of users paying for the product continues to grow by more than 6.77 million, and the payment rate is steadily increasing to 5.28% every year. The current revenue share of Business Card Almighty King is relatively small. The number of paying users reached 0.1106 million in '23, an increase of over 31%, and the payment rate has steadily increased to 3.36%.

The B-side business of commercial big data grew rapidly, and the C-side Qixinbao bottomed out and rebounded. Qi Xinbao is ranked third in the C-side market for C-side commercial information inquiries. Increased competition in recent years has led to a decline in paying users and revenue.

However, in January 23, key indicators such as active users, number of new paid users, and number of new registered users stopped falling and rebounded.

The B-side of commercial big data is the company's key development direction. The company has formed a number of benchmark cases, leading its competitive advantage; revenue reached 0.115 billion yuan in 23, and the compound growth rate exceeded 31% in 20-23.

Big models and data elements bring new opportunities, and increased payment rates and overseas markets can be expected. In the face of a shortage of high-quality Chinese material, the company launched a large model “accelerator” to better analyze unstructured data such as papers and charts to provide a new “water source” for the big model. The company has established a hierarchical data asset construction framework (DIKI), and Qixin Huigan has formed a number of B-side benchmark cases, and product development has been smooth. Compared with similar tool products such as Jinshan, the company's C-end products still have a lot of room to improve the payment rate. On the other hand, the company was established overseas earlier, and some developing countries still have a large gap in payment rates compared to domestic ones, and there is plenty of space for overseas markets.

Profit forecast and valuation: The company's revenue is expected to be 1.438/1.746/2.13 billion yuan in 2024-26; net profit to mother is 0.388/0.486/0.595 billion yuan, and EPS is 3.88/4.86/5.95 yuan respectively. Through multi-angle valuation, the reasonable valuation range for the company's stock is between 228.42-256.86 yuan. Compared with the company's current stock price, there is 24.90% -40.41% valuation space. The first coverage gave it an “superior to the market” rating.

Risk warning: Competition in the industry is intensifying; downstream IT spending is tightening; payment rates are falling short of expectations, etc.