Leading digital content copyright trading, performance is back on the rise. By the end of 2023, the company had collected more than 530 million high-quality digital content such as images, videos, music, etc., and is a scarce leading company covering the entire digital content copyright trading industry chain.

In 2019-2020, the company's performance declined due to two shutdowns and rectification. After 3 years of business adjustments, the company is returning to a growth trend. In 2023, the company achieved revenue of 781 million yuan, an increase of 11.9%; net profit to mother was 146 million, an increase of 46.8%.

Massive scarce compliant visual content data resources to dig deeper into the needs of customer application scenarios. The company not only has a large reserve of high-quality content, but also guarantees the continuous supply of genuine high-quality content through its own copyright image library, exclusive licensing agreement, and creative community ecosystem. On this basis, the company digs deep into customer needs in industries such as party and government media, brand enterprises, advertising and marketing, and Internet platforms to provide them with standardized products or value-added services. Customers are highly sticky, and the renewal rate for Changxie customers with annual sales of 100,000 yuan or more remains 80%.

Establish an “AI+content+scenario” development strategy and fully embrace AI empowerment. Based on massive and scarce structured data and ability to dig deep into application scenarios, the company established an “AI+ content+scenario” development strategy in 2023, and used AI to fully empower the product system, including launching AI intelligent search, AIGC customized content, and AI-driven digital asset management solutions. Aippt.cn, an AI office tool product owned by iDesign, a shareholding subsidiary, ranked 9th in domestic AIGC product visits in May 2024, and was integrated into Lenovo AI PCs, and is expected to become an AI tool product that can achieve a single-point breakthrough faster.

Using Aippt.cn's active exploration as a starting point, focus on consolidating or reshaping existing business models. Aippt.cn is the company's active exploration from To-B service to To-C service. If it can seize the industrial opportunities brought by this round of technology upgrades, while expanding the value of existing content, it should also pay attention to whether the future business model will be consolidated or reshaped, thereby increasing the value of the company's industrial chain.

Investment advice: Macroeconomic restoration drives customer usage frequency. Adding AI to empowering existing product systems is expected to deepen payment depth, and will also reduce costs and increase efficiency for one's own business, which is expected to eventually drive performance growth. It is expected to achieve net profit of 154 million, 185 million, and 219 million yuan in 2024-2026, corresponding to EPS of 0.22 yuan, 0.26 yuan, and 0.31 yuan. Our company, Aippt.cn, is a leading AI tool product in China. It has outstanding growth and a certain valuation premium. We gave the company 60 times PE in 2024, corresponding to a 6-month target price of 13.2 yuan. For the first time, coverage gave it a “holder-A” rating.

Risk warning: downstream demand growth falls short of expectations, competition intensifies risks, and AI-enabled business progress falls short of expectations