Incidents:
On March 29, 2025, the company released its 2024 annual report: in 2024, the company's revenue was 9.153 billion yuan, -6.57%; net profit to mother was -2.061 billion yuan, compared to the same period last year -0.967 billion yuan; net profit without deducted back to mother - -2.038 billion yuan, or -1.104 billion yuan for the same period last year.
2024Q4, the company's revenue was 3.415 billion yuan, -16.48%; net profit due to mother was -0.606 billion yuan, 0.063 billion yuan in the same period last year; net profit not returned to mother was -0.554 billion yuan, or 0.032 billion yuan in the same period last year.
Key investment points:
Multiple factors dragged down profits in 2024. Under strict fee control, the company's performance is expected to gradually improve the company's losses in 2024, including: 1) amortization of capitalized intangible assets formed from R&D investment increased by 0.3 billion yuan over the previous year; 2) financial compensation for leavers increased by 0.142 billion yuan; 3) impairment losses on long-term equity investments increased by 60.55 million yuan over the previous year, and investment income decreased by 23.41 million yuan compared to the previous year; 4) Accrued goodwill impairment losses increased by 0.156 billion yuan over the previous year billion yuan; 5) Investment losses measured at fair value and the change included in current profit and loss increased by 69.34 million yuan over the previous year.
In 2024, the company's sales/management/R&D expenses rate was 28.64%/13.34%/23.18%, compared with +0.64/+2.02/+1.68pct. In 2024, the company further optimized its business organization, controlled personnel size and optimized personnel structure. By the end of 2024, the number of employees in the company was 21,283, a year-on-year decrease of 3666. We believe that in the context of strict fee control and AI to accelerate internal empowerment, the company's profit situation is expected to gradually improve.
Adhering to the cloud subscription transformation, large/medium enterprise customer subscription revenue +26%/+66% in 2024, the company's large enterprise customer revenue was 5.864 billion yuan, -10.0% year over year, and the core product YonBIP renewal rate reached 91.5%; Chinese enterprise customers earned 1.251 billion yuan, -9.7% year over year; Changjietong revenue was 0.965 billion yuan, +19.7% year on year; government and other public organization customer revenue was 0.907 billion yuan, -7.7%; overseas Business revenue increased by more than 50% year on year; the cumulative number of paying customers for the company's cloud services was 0.8725 million, and 0.1575 million new paid cloud service customers were added.
Large enterprise customers: The core product BIP3 achieved revenue of 3.14 billion yuan, accounting for +2.4 pct of total revenue; subscription revenue was +26.0%; by the end of 2024, 7 new first-tier central enterprises had signed, with a total of 44 contracts. Benchmark customers such as China Mobile, China Salt Group, and CRRC successfully launched a number of projects.
Medium-sized enterprise customers: Adhering to the subscription development strategy, cloud service business revenue was 0.933 billion yuan, +7.9% year-on-year, and subscription business revenue +65.8%; YonSuite continued to steadily iterate and improve around the entire scenario of growing enterprises to achieve social level collaborative integration between industry, finance, tax, and warehouse, maintaining rapid business growth for many consecutive quarters, and the renewal rate continued to rise to 95.0%.
Changjietong: It has successfully transformed the cloud subscription business model; cloud subscription revenue was 0.656 billion yuan, +34.1%, accounting for 68.0% of Changjietong's overall revenue; achieved net profit of 33.46 million yuan; added 0.143 million paid enterprise users for cloud services, with a cumulative total of 0.775 million paid enterprise users.
Released a variety of intelligent assistants, BIP connected to DeepSeek and other mainstream model companies actively embraced AI and released YongPt2.0, a large-scale enterprise service model; released general products such as intelligent assistants, digital smart employees, and smart think tanks and more than 100 scenario-based enterprise intelligence services based on application frameworks such as agents, covering enterprise service fields such as finance, manpower, supply chain, etc., and successfully built and released professional models for public resource transactions, industrial equipment and transportation construction industries. It was the first to achieve successful application in leading customers such as China Merchants Group (HR Digital Intelligence Employees), China Minmetals (Financial Digital Intelligence Employees), and Yuandong Digital Intelligence (YongPT generates procurement tender documents).
In February 2025, Youyou BIP was launched and connected to DeepSeek, continuously upgraded the Youyou BIP intelligent service, and connected to various large-scale model services such as Doubao, Qianwen, and Baichuan to achieve integrated innovation of domestic enterprise software, cloud services, and domestic big models to meet the intelligent needs of enterprises with different business themes and scenarios. In 2024, BIP3 released R5 and R6 versions to enhance AI integration, data services, and globalization capabilities. Through innovative technology, resource consumption was reduced by 50% year-on-year and operation and maintenance costs were reduced by 30%; it supports the processing of data entry for 10 billion items, and the seamless integration of 100 billion level main schedule data.
Profit forecast and investment rating: The company's cloud revenue continues to rise, subscription transformation accelerates, and large-scale model empowerment scenarios and applications continue to be deepened; the company's 2025-2027 revenue is 10.007/11.047/12.314 billion yuan, and net profit to mother is -0.29/0.387/0.721 billion yuan; corresponding to 2026-2027 EPS is 0.11/0.21 yuan, and PE is 132/71x respectively; maintaining the “increase in holdings” rating.
Risk warning: Macroeconomics affects downstream customer demand, customer renewal falls short of expectations, company cost control falls short of expectations, product iteration falls short of expectations, market competition intensifies, etc.
