Incident: The company released its 2023 annual report, with revenue of 1.97 billion yuan, an increase of 2.69% over the previous year; net profit to mother was 177 million yuan, a decrease of 7.92% over the previous year.

The company released its 2024 quarterly report, with revenue of 400 million yuan, a year-on-year decrease of 0.83%; net profit to mother was 0.26 million yuan, a year-on-year decrease of 16.90%.

Release the BioCV model and smart retail solution. The company's BioCV LLM3.0 large model project research is mainly used to simulate and enhance small models to enable smart retail scenarios on the edge computing side. ZKDIGIMAX L3 is a one-stop digital marketing solution for small and medium-sized retail stores. It supports 5 core services, namely Minervaiot IoT platform, machine vision analysis platform, big data analysis platform, AIGC platform, and advertising production and distribution platform.

Traditional businesses have maintained steady growth and updated iterative product lines. MinerVaiot, the company's entropy-based cloud IoT platform, provides undeployed SaaS applications for smart office scenarios, smart entry/exit scenarios, and smart home scenarios. For system integration customers, we can provide an entropy-based Baiao Intelligence trusted identity authentication platform; for large park enterprise customers, we can provide the Entropy Anyuntong Smart Park Integrated Management Platform V8800, Wanaoruida Intelligent Integrated Management Platform V6600, Wanaorida Integrated Entrance and Exit Integrated Management Platform V6000; e-ZKECO Pro, an entropy-based time and security refined service platform for medium and large enterprise customers; and the entropy-based cloud attendance access control management system BioTime8.0, etc. can be provided for overseas customers.

Investment advice: The company's traditional business has maintained steady growth, and the smart retail business is expected to become the company's second growth curve. The company's EPS is expected to be 1.22\ 1.58\ 2.06 yuan in 2024-2026, respectively, maintaining a “buy” rating.

Risk warning: The smart retail sector falls short of expectations; overseas development falls short of expectations; industry competition intensifies.