IFLYTEK(002230) 中银证券·2024-07-11 14:00Investment Rating - The report maintains a Buy rating for the company, with a target price of RMB 39.00 [1] - The sector rating is Outperform [1] Core Views - The company's revenue and gross profit are expected to grow by 15%-20% in H1 2024, with gross profit increasing by approximately RMB 600 million [3][4] - The company's net profit attributable to shareholders is expected to decline significantly in H1 2024, primarily due to increased R&D investment in cognitive large models, reduced investment income, and higher bad debt provisions [4] - The company has upgraded its Spark Large Model V4.0, which has surpassed GPT-4 Turbo in multiple evaluations, and has launched intelligent products in various fields such as education, healthcare, and automotive [4] - The upgraded large model has driven a 70% YoY growth in C-end smart hardware sales during the "618" shopping festival [4] Financial Forecasts - Revenue is expected to grow by 20.1% in 2024, reaching RMB 23.6 billion, with further growth of 19.7% and 16.4% in 2025 and 2026, respectively [5] - Net profit attributable to shareholders is forecasted to be RMB 896 million in 2024, with growth rates of 36.3%, 60.0%, and 15.5% in 2024, 2025, and 2026, respectively [5] - EPS is expected to be RMB 0.39, RMB 0.62, and RMB 0.72 in 2024, 2025, and 2026, respectively, with a downward revision of 16-20% due to increased investment in large models [4][5] - The company's P/E ratio is projected to be 101X, 63X, and 54X for 2024, 2025, and 2026, respectively [4] Valuation and Metrics - The company's market capitalization is RMB 90.16 billion, with a 3-month average daily trading volume of RMB 1.35 billion [2] - The company's EV/EBITDA ratio is expected to decrease from 112.8X in 2023 to 57.4X in 2024, and further to 44.3X in 2025 [5] - The company's ROE is forecasted to improve from 3.9% in 2023 to 5.1% in 2024, and further to 7.6% and 8.2% in 2025 and 2026, respectively [6] Key Developments - The company has significantly increased its R&D investment in cognitive large models, with over RMB 650 million invested in H1 2024 [4] - The company has launched the Spark Large Model V4.0, which is based on the domestically developed Feixing One computing cluster, and has achieved leading performance in multiple application scenarios [4] - The company's C-end smart hardware sales have seen strong growth, driven by the upgraded large model capabilities [4]