There was almost no suspense. The three-quarter report of Bairong Yunchuang (Bairong Yun-W, 6608.HK) once again delivered high growth results.

According to the third quarter unaudited operating summary (hereinafter referred to as the “Three Quarterly Report”) recently released by Bairong Yunchuang, in the first nine months of this year, the company's total revenue reached 1,983 billion yuan (RMB, same below), close to the total revenue for the full year of last year, an increase of 33% over the previous year. In addition to MaaS, the cornerstone business, which continues to contribute to steady growth, the BaaS business has performed even more brilliantly, becoming an important driving engine for the company's large-scale expansion.

After the release of Bairong Yunchuang's third quarterly report, several brokerage firms released research reports stating that they had raised Bairong Yunchuang's target price and net profit expectations. Among them, Haitong International raised its target price to HK$24.49 per share, which has room for 46% increase from the current price and maintains its “superior to market” rating.

The cornerstone business is steady, and the second growth curve has shown impressive performance

As a leader in AI technology with one-stop services, Bairong Yunchuang has always had outstanding performance since its listing. It is one of the few AI companies in the industry that continues to reap profits. The company's biggest “cash cow” comes from the second growth curve driven by AiGC - BaaS (Business as a Service) business.

The three-quarter report shows that in the first nine months of this year, Bairong Yunchuang's BaaS business revenue reached 1,319 billion yuan, an increase of 40% over the previous year. Looking at business line segmentation, the BaaS financial industry's cloud revenue was 836 million yuan, an increase of 60% over the previous year; the BaaS insurance industry's cloud revenue was 483 million yuan, an increase of 16% over the previous year.

Combined with previous financial reports, it can be seen that the cloud revenue of the BaaS financial industry in the Q3 quarter reached 340 million yuan, an increase of 67.5% over the previous year. According to reports, the BaaS Financial Industry Cloud aims to provide one-stop turnkey asset operation services for banks, wealth management and other institutions. The scale of asset transactions coordinated by this business line in the first half of this year has increased to 21,262 billion yuan, an increase of 72% over the previous year. According to the current growth trend, it is foreseeable that the total amount of asset transactions facilitated by BaaS Financial Industry Cloud will double year on year throughout this year.

The three-quarter report also shows that in the first nine months of this year, Bairong Yunchuang's MaaS (model as a service) business revenue reached 665 million yuan, an increase of 22% over the previous year. The retention rate of core customers remained high at 98%; the number of core customers reached 183, an increase of 17% over the previous year; and the average revenue of core customers increased to 3.04 million yuan.

At an investor conference held recently by Bairong Yunchuang, Zhang Shaofeng, founder and CEO of Bairong Yunchuang, while summarizing the company's performance in the first three quarters, said that Bairong Yunchuang's growth drivers are mainly due to seizing AIGC's industry opportunities and rapidly expanding application-side business. The company organically integrates decision-making AI and generative AI to provide an end-to-end one-stop turnkey service, with an obvious first-mover advantage.

Zhang Shaofeng said that Bairong Yunchuang was able to quickly form a large-scale effect due to the company's three major competitive barriers. One is to find the right application scenarios in vertical fields; two is to combine industry trends over the past ten years; and third, it has strong field AI algorithms and exclusive user tags. The three advantages have been combined to build a strong moat for Bairong Yunchuang.

The AI product matrix is rich, and application scenarios are gradually expanding

Judging from the progress of AI products, according to the three-quarter report, based on the organic integration of decision-making AI and generative AI, Bairong Yunchuang's product matrix is even richer. The most notable of these is that Bairong Yunchuang's ability to apply the model continues to improve. According to financial reports, based on the large model BR-LLM foundation, Bairong Yunchuang has now developed several major AI product platforms. For example, the Cybertron platform developed based on BR-LLM can quickly visually generate an enterprise's internal bot, connect with the enterprise's internal knowledge base and tool base, and provide AI Copilot and AI agents to the outside world.

Furthermore, the Cybertron platform has now incubated several types of AI robot products for different purposes, including AI digital employees, digital customer service personnel, etc., which can help optimize internal processes and improve business work efficiency.

Another example is BR-Coder, a new intelligent code generation assistant developed based on BR-LLM, which can greatly improve the development efficiency of programmers, reduce the cycle and cost of model product development and deployment, and help commercial institutions improve the quality and efficiency of R&D.

Along with the increasingly rich AI product matrix, Bairong Yunchuang uses AI to empower vertical fields with deeper and more complete industrial chains, and has gradually formed business chains such as intelligent marketing, inventory operation, and user management. Strong product service capabilities have also further deepened its cooperative relationships with customers.

According to data, Bairong Yunchuang currently serves more than 7,000 commercial institutions. The customer base covers various vertical scenarios such as banking, insurance, e-commerce, automobiles, recruitment, travel, logistics, ticketing, takeout, and travel. Among these, there are more than 2,000 non-financial insurance customers, accounting for close to 1/3.

With deep industry insight, continuously optimized AI models, and a solid customer base of commercial institutions, many brokerage institutions anticipate that Bairong Yunchuang's business revenue and profit will continue to grow in the future.

According to the CICC Research Report, Bairong Yunchuang, based on self-developed vertical generative AI capabilities, empowers the marketing side of enterprises through the automatic machine learning platform ORCA, the large model BR-LLM, the intelligent voice robot AI Chatbot, and the privacy computing platform Indra, etc., to help partners improve customer acquisition efficiency and transaction volume, and has strong growth prospects. Therefore, the net profit target for this year and next two years has been raised by 20% and 22%, respectively, to maintain the company's outperforming industry ratings.

According to the Haitong International Research Report, in the vertical field, model self-iteration is the key to large-scale commercial implementation of large models. In this regard, Bairong Yunchuang has obvious advantages, which in turn can effectively build a vertical AI moat. In addition, the company's diversified customer base has formed, and it is expected that its net profit CAGR for the 2022-2024 period will increase to 35%. Haitong International also predicts that Bairong Yunchuang's target market value will exceed the 10 billion yuan mark and reach 11.347 billion yuan.