SENSETIME(20.HK):STRENGTHENING GEN AI COMPETITIVE EDGES
SENSETIME(20.HK):STRENGTHENING GEN AI COMPETITIVE EDGES
More conservative GPM outlook in FY24-26E. GPM was 44.1% in 1H24, down 1.2ppt YoY, mainly due to the increase in AIDC operation costs. Thanks to the operating leverage and control in selling & administrative expenses, adjusted net margin improved by 33ppt YoY to -134% in 1H24. Looking ahead, we expect the GPM will gradually decline to 38% in FY26E, as SenseTime will expand its computing power through partner network instead of its own capex investments. However, this adjustment should improve its cash flow and financial flexibility. For its long-term path to profitability, we expect SenseTime will need to make meaningful improvement in operating efficiency.SenseTime announced 1H24 results on 27 Aug: total revenue grew by 21% YoY to RMB1.74bn, largely in line with our estimate; adjusted net loss narrowed by 3% YoY to RMB2.33bn with net loss margin improving by 33ppt YoY to -134%, which is below full-year consensus margin estimate of -79% due to continuous investments in foundations models and generative AI application development. Looking ahead in 2H24E, we expect total revenue growth will further accelerate to +33% YoY, driven by the robust growth of Gen AI business. We maintain our FY24- 26E total revenue forecast largely unchanged but expect larger adjusted net loss of RMB3.5/2.5/1.7bn over FY24-26E (previous: RMB3.1/2.3/1.6bn), mainly due to more conservative GPM outlook as SenseTime will expand its computing power through a partner network. We fine-tuned our target price to HK$1.36 based on 6.5x FY25E EV/sales (previous: HK$1.25 based on 7.0x FY24E EV/sales), a premium to the average EV/sales of China's AI peers (5.2x), reflecting SenseTime's strong positioning in the Gen AI market.
商湯在8月27日公佈了1H24的業績：總營業收入同比增長21%，達到17.4億元人民幣，基本符合我們的預期；調整後淨虧損同比縮小3%，達到23.3億元人民幣，淨虧損率同比改善33個百分點，達到-134%，但仍低於全年共識淨虧損率的-79%，這是由於持續投資於基礎模型和生成式人工智能應用開發所致。展望2H24E，我們預計總營業收入增速將進一步加快，達到33%的同比增長，這是由於天恒智能業務的強勁增長所驅動。我們基本保持了FY24-26E的總營業收入預測不變，但預計FY24-26E的調整後淨虧損將增加到35/25/17億元人民幣（之前爲31/23/16億元人民幣），主要是由於天恒將通過合作伙伴網絡擴大其計算能力，因此對GPm持更保守的觀點。我們根據6.5倍FY25E銷售額/市值調整了目標價格至1.36港元（之前根據7.0倍FY24E銷售額/市值調整了目標價格至1.25港元），溢價於中國人工智能同行的平均銷售額/市值比（5.2倍），反映了商湯在Gen AI市場中的強勢地位。
Gen AI business as the key growth driver. Gen AI business revenue increased by 256% YoY to RMB1.05bn and represented 60% of total revenue in 1H24 (1H23: 21%), fuelled by the strong demand for large models and AIDC. The number of users registered for SenseNova MaaS grew by 725% from Jan to Jul 2024. As per IDC, SenseTime became the third largest AIDC service provider in China in 2H23, with market share of 15.4%. Smart Auto business revenue grew by 100% YoY to RMB168mn in 1H24. 705k new vehicles were delivered in 1H24, up 80% YoY. SenseTime was confirmed as the designated supplier for 15 new models in 1H24, which represents additional 6mn vehicles and will support future growth of Smart Auto. Traditional AI revenue declined by 51% YoY to RMB520mn in 1H24, primarily due to adjustment of Smart City business.
Gen AI業務是主要的增長驅動因素。Gen AI業務收入同比增長256%，達到10.5億元人民幣，佔1H24總營業收入的60%（1H23：21%），得益於對大型模型和AI數據中心的強勁需求。2024年1月至7月期間，SenseNova MaaS註冊用戶數量增長了725%。根據IDC的數據，商湯成爲了中國第三大AI數據中心服務提供商，市場份額爲15.4%。1H24智能汽車業務收入同比增長100%，達到1.68億元人民幣。1H24新增交付車輛達70.5萬輛，同比增長80%。商湯在1H24被確定爲15款新車的指定供應商，這將增加600萬輛車輛，並支持未來智能汽車業務的增長。1H24傳統AI業務收入同比下降51%，主要是由於對智慧城市業務的調整。
Positive on SenseTime's Gen AI competitive edge. For 2H24E, we expect SenseTime's total revenue to grow by 33% YoY to RMB2.62bn, mainly driven by 75% YoY growth in Gen AI business revenue. We are upbeat on SenseTime's positioning in China's Gen AI market, given its: 1) strong AI infrastructure with total operational computing power exceeding 20,000 PetaFLOPS, and management expects it to surpass 25,000 PetaFLOPS by end-FY24; 2) solid operational capabilities for large-scale AI clusters; 3) independence (had no direct competition) to its suppliers and clients.
對商湯的Gen AI競爭優勢持樂觀態度。對於2H24E，我們預計商湯的總營業收入將同比增長33%，達到26.2億元人民幣，主要由Gen AI業務收入同比增長75%驅動。我們看好商湯在中國Gen AI市場的定位，因爲它具備以下優勢：1）強大的人工智能基礎設施，總運算能力超過20,000 PetaFLOPS，管理層預計到FY24年底將超過25,000 PetaFLOPS；2）爲大規模AI集群提供穩定的運營能力；3）獨立於供應商和客戶（沒有直接競爭關係）。
More conservative GPM outlook in FY24-26E. GPM was 44.1% in 1H24, down 1.2ppt YoY, mainly due to the increase in AIDC operation costs. Thanks to the operating leverage and control in selling & administrative expenses, adjusted net margin improved by 33ppt YoY to -134% in 1H24. Looking ahead, we expect the GPM will gradually decline to 38% in FY26E, as SenseTime will expand its computing power through partner network instead of its own capex investments. However, this adjustment should improve its cash flow and financial flexibility. For its long-term path to profitability, we expect SenseTime will need to make meaningful improvement in operating efficiency.
在FY24-26E中，GPm的前景更爲保守。1H24的GPm爲44.1％，同比下降1.2個百分點，主要是由於AIDC運營成本的增加。得益於運營槓桿和銷售行政費用的控制，1H24的調整後淨利潤率同比提高了33個百分點，達到-134％。展望未來，我們預計GPm將逐漸下降到FY26E的38％，因爲商湯將通過合作伙伴網絡擴展其計算能力，而不是自己的資本支出。然而，這種調整應該會改善其現金流和財務靈活性。對於其長期盈利能力，我們預計商湯將需要在經營效率方面進行有意義的改善。
譯文內容由第三人軟體翻譯。
