Incident: The company released its 2024 annual report, with revenue of 9.153 billion yuan, a year-on-year decrease of 6.57%; net profit to mother - -2.061 billion yuan, a year-on-year decrease of 113.13%.
Subscription revenue continues to increase. In 2024, the company's large enterprise revenue was 5.864 billion yuan, down 10.0% year on year; revenue from medium-sized enterprises was 1.251 billion yuan, down 9.7% year on year; Changjietong's revenue was 0.965 billion yuan, up 19.7% year on year; and revenue from government and other public organizations was 0.907 billion yuan, down 7.7% year on year. The cloud service business achieved revenue of 6.85 billion yuan, a year-on-year decrease of 3.4%. Subscription revenue increased 26.0% year over year.
Personnel expenses have been reduced, and contract debt performance has improved. At the end of the reporting period, the number of employees in the company was 21,283, a decrease of 3,666 compared to the end of 2023. Financial compensation for retirees was increased by 0.142 billion yuan accordingly. The cumulative number of paid customers for the company's cloud services was 0.8725 million, and 0.1575 million new cloud service paying customers were added. Cloud business-related contract liabilities were $2.78 billion, up 13.0% from the end of 2023, and subscription related contract liabilities were $2.31 billion, up 25.9% from the end of 2023.
On top of BIP, the YongPt2.0 big model was released. With the release of Deepseek, BIP was launched to access DeepSeek's large model, which is leading in processing complex information, reasoning ability, openness, and operating costs. The company's core product, BIP3, has released R5 and R6 versions to comprehensively enhance AI integration, data services, and globalization capabilities. In 2024, the company released YongPt2.0, a large-scale enterprise service model, and released intelligent assistants, digital intelligence employees, and friendly think tanks based on application frameworks such as Agent (intelligent), HCI (human-computer interaction), and RAG (integrating search technology with generative AI).
Investment advice: The company continues to explore AI at this stage. The company's EPS is expected to be -0.15\ 0.02\ 0.10 yuan in 2025-2027, respectively, maintaining a “buy” rating.
Risk warning: Cloud transformation falls short of expectations; industry competition intensifies.
