Group 1 - The core point of the article is that SenseTime-W announced a placement of new Class B shares to raise HKD 27.98 billion [1] - The number of shares to be placed is 1.865 billion, with a placement price of HKD 1.50 per share [2] - The net proceeds will primarily be used for the company's core business development, including AI cloud construction, enhancement of SenseTime's large-scale devices, and development of generative artificial intelligence, as well as for general working capital [2]

Investment Rating - Maintains a **Buy** rating for SenseTime with a target price of **HK$2.00**, up from HK$1.36, based on a 9.0x EV/Sales multiple for FY25E [1][18] Core Views - SenseTime has completed a strategic reorganization, adopting a "1+X" structure to focus on its core AI cloud services, large models, and AI applications, while other ecosystem businesses (smart cars, home robots, smart healthcare, smart retail) operate independently with flexible incentives and financing [1] - The reorganization is expected to accelerate SenseTime's path to breakeven, with breakeven now projected in FY26E (previously expected adjusted net loss of RMB 1.7 billion) [1] - The core AI cloud and Gen AI businesses grew 256% YoY in H1 2024, contributing 60% of total revenue, with significant cost reductions expected as core business headcount is reduced to less than 2,000 (50% of pre-reorganization total) [2] - SenseTime's Gen AI business is expected to grow at a 68% CAGR from FY24 to FY26, driven by increasing computing power and strong demand for AI computing [5] - SenseTime's total operational computing power reached over 20,000 PetaFLOPS in August 2024 (up 233% YoY), with management targeting over 25,000 PetaFLOPS by the end of FY24 [5] Financial Summary - Revenue is projected to grow from RMB 4,541 million in FY24E to RMB 7,498 million in FY26E, with adjusted net profit turning positive at RMB 84.1 million in FY26E [4] - Gross margin is expected to improve from 42.8% in FY24E to 39.0% in FY26E, while adjusted net profit margin is forecasted to turn positive at 1.0% in FY26E [15] - Operating cash flow is expected to improve significantly, turning positive at RMB 199 million in FY24E and reaching RMB 2,798 million by FY26E [25] Valuation - SenseTime's target EV/Sales multiple of 9.0x for FY25E is higher than the industry average of 7.8x, reflecting its leading position in China's Gen AI cloud services market and strong AI infrastructure [18] - The company's EV/Sales multiple is expected to decline from 9.8x in FY24E to 6.8x in FY26E, indicating improving profitability and valuation [25] Market Position - SenseTime ranks third in China's Gen AI IaaS market with a 15% market share as of Q2 2023 [5] - The company's strong AI infrastructure positions it to benefit from the growth of Gen AI, with significant investments in computing power and large models [5]

Investment Rating - The report maintains a "BUY" rating for SenseTime, with a target price raised to HK$2.00, reflecting a potential upside of 17.0% from the current price of HK$1.71 [3][10]. Core Insights - SenseTime has completed a strategic organizational restructuring to focus on its generative AI business, which is expected to accelerate its path to breakeven by FY26E [1]. - The revenue from the core AI Cloud and generative AI businesses grew by 256% year-over-year, accounting for 60% of total revenue in 1H24 [1]. - The restructuring is anticipated to lead to significant expense reductions, with the core business headcount reduced to below 2,000, representing less than 50% of the total group headcount prior to restructuring [1]. Financial Summary - Revenue projections for FY24E, FY25E, and FY26E are RMB4,541 million, RMB5,955 million, and RMB7,498 million respectively, indicating a growth trajectory [2][13]. - Adjusted net profit is expected to improve from a loss of RMB3,615.9 million in FY24E to a profit of RMB84.1 million in FY26E [2][13]. - The adjusted net margin is forecasted to improve from -79.6% in FY24E to +1.1% in FY26E, driven by robust growth in the generative AI business and a significant decline in operating expenses [1][2]. Market Position - SenseTime is positioned as the third largest generative AI IaaS service provider in China, holding a market share of 15% as of 2H23 [1]. - The company’s total operating computing power exceeded 20,000 PetaFLOPS in August 2024, with expectations to surpass 25,000 PetaFLOPS by the end of FY24 [1]. Valuation - The target price of HK$2.00 is based on a valuation of 9.0x FY25E EV/Sales, which is at a premium to the sector average of 7.8x, reflecting SenseTime's leadership in the generative AI cloud services market [10].

Financial Performance - Total revenue for the first half of 2024 reached RMB 1,739.7 million, representing a year-on-year increase of 21.4%[19] - Gross profit amounted to RMB 766.8 million, with a gross margin of 44.1%, up 18.2% year-on-year[19] - The company reported a net loss of RMB 2,477.2 million, a decrease of 21.2% compared to the previous year[21] - Revenue from generative AI business surged by 255.7% to RMB 1,051.2 million, accounting for 60.4% of total revenue[21] - Revenue from the "Zhi Ying" smart vehicle business increased by 100.4% to RMB 168.1 million[21] - The company's overseas business grew steadily, with a year-on-year revenue increase of 40.1%, contributing 18.5% to total revenue[21] - The adjusted EBITDA loss was RMB 1,889.6 million, a reduction of 6.7% year-on-year[19] - Operating loss for the first half of 2024 was RMB 2,721.5 million, an improvement from RMB 3,347.3 million in the same period of 2023[27] - Adjusted EBITDA for the first half of 2024 was RMB (1,889.6) million, compared to RMB (2,025.9) million in the first half of 2023[27] Revenue Breakdown - Revenue from the generative AI business reached RMB 1,051.2 million in the first half of 2024, representing a year-on-year growth of 255.7% and contributing over 60.4% to the group's overall revenue[22] - Traditional AI revenue decreased from RMB 1,053.7 million in the first half of 2023 to RMB 520.4 million in the first half of 2024, representing 29.9% of total revenue[29] - Smart vehicle business generated RMB 168.1 million in revenue, a 100.4% year-on-year increase, with 705,000 units delivered, up 80.0%[24] Expenses and Costs - Research and development expenses rose by 6.1% to RMB 1,892.2 million, with a total of 3,399 R&D personnel[21] - Sales expenses decreased by 21.2% to RMB 329.2 million, while administrative expenses fell by 7.7% to RMB 734.9 million[21] - Cost of sales increased by 24.0% from RMB 784.4 million for the six months ended June 30, 2023, to RMB 973.0 million for the six months ended June 30, 2024, primarily due to higher hardware costs and subcontracting services[31] - Gross profit increased by 18.2% from RMB 648.7 million for the six months ended June 30, 2023, to RMB 766.8 million for the six months ended June 30, 2024, with a slight decrease in gross margin from 45.3% to 44.1%[33] Cash Flow and Liquidity - The total cash and cash equivalents decreased from RMB 9,423.5 million at the beginning of the period to RMB 7,626.5 million at the end of the period, representing a reduction of approximately 19.1%[44] - Net cash used in operating activities for the six months ended June 30, 2024, was RMB 3,523.8 million, compared to RMB 1,804.8 million for the same period in 2023, indicating a significant increase in cash outflow[45] - Net cash used in investing activities was RMB 1,068.2 million for the six months ended June 30, 2024, primarily due to purchases of property, plant, and equipment, as well as debt and equity investments[47] - Net cash generated from financing activities was RMB 2,722.7 million, mainly from the proceeds of ordinary share placements[48] Assets and Liabilities - Total assets as of June 30, 2024, were RMB 32,550,214 thousand, a slight decrease from RMB 32,888,024 thousand at the end of 2023[62] - As of June 30, 2024, total liabilities increased to RMB 9,845,655 thousand from RMB 9,732,551 thousand as of December 31, 2023, representing a growth of approximately 1.16%[63] - The company reported a total of approximately RMB 4,270.4 million in collateralized assets as of June 30, 2024[55] - The aging of trade receivables showed a deterioration, with amounts over 3 years increasing from RMB 1,541.6 million to RMB 2,435.7 million[43] Investments and Financial Instruments - The fair value of financial assets measured at fair value through profit or loss amounted to RMB 7,399,101,000, while financial liabilities totaled RMB 1,954,203,000[76] - The Group's Level 2 financial assets were valued at RMB 6,960,980,000, and Level 3 financial assets were RMB 7,399,101,000 as of June 30, 2024[76] - The total fair value of Level 3 financial instruments decreased to RMB 5,006,777,000 from RMB 5,475,517,000 as of June 30, 2023, reflecting a change of approximately 8.56%[81] Employee and Management Compensation - The total compensation for key management personnel was RMB 10,810 thousand for the six months ended June 30, 2024, compared to RMB 14,975 thousand for the same period in 2023, reflecting a decrease of approximately 27.7%[197] - Employee benefits expenses totaled RMB 1,709,503,000, a decrease of 10.5% from RMB 1,909,104,000 in the previous year[98] Strategic Initiatives and Future Plans - The company aims to enhance its industry-leading AI infrastructure and support further development of generative AI with the allocated funds[54] - The company continues to focus on expanding its artificial intelligence software and related services across various regions, including Northeast Asia and Southeast Asia, as part of its growth strategy[68] Government and Regulatory Matters - The effective tax rate for the group’s entities in mainland China is 15% due to their qualification as "high-tech enterprises," compared to the standard rate of 25%[105] - Government subsidies received amounted to RMB 101,665 thousand, a significant increase from RMB 76,476 thousand in the same period last year, representing a growth of 32.9%[99]

Investment Rating - The report maintains a "Buy" rating for SenseTime-W (0020) with a target price of HKD 2.25 [1][3]. Core Insights - The company achieved steady growth in the first half of 2024, driven by significant growth in its generative AI business, which has become a key growth driver. The smart automotive business is also experiencing rapid growth and is expected to exceed expectations [3]. - The report forecasts revenues of RMB 45.76 billion, RMB 60.05 billion, and RMB 77.06 billion for 2024, 2025, and 2026 respectively, maintaining the target price of HKD 2.25, which corresponds to a 15.16x price-to-sales ratio for 2024 [3]. - In the first half of 2024, the company reported revenue of RMB 18.49 billion, a year-on-year increase of 29.04%, and a net loss attributable to shareholders of RMB 24.57 billion, with the loss margin reduced by 21.33% [3]. Financial Summary - The company's revenue for 2024 is projected to be RMB 45.76 billion, with a growth rate of 34% compared to 2023. The gross profit is expected to be RMB 1.968 billion, with a net loss of RMB 4.538 billion [4]. - The generative AI business generated revenue of RMB 10.51 billion in the first half of 2024, a substantial year-on-year increase of 255.7%, accounting for 60.4% of total revenue, up 39.8 percentage points year-on-year [3]. - The smart automotive business achieved revenue of RMB 1.68 billion in the first half of 2024, a year-on-year increase of 100.4%, with a revenue share of 9.7%, up 3.8 percentage points year-on-year [3].

Investment Rating - The report maintains an "Outperform" rating for the company [8] Core Views - The company has achieved significant revenue growth, with its generative AI business contributing 60.4% of total revenue in H1 2024, reflecting a 255.7% year-on-year increase [8][10] - The overall revenue for H1 2024 reached 1.74 billion, marking a 21.4% increase compared to the previous year [8] - The company is well-positioned for future growth, leveraging its core strengths in large models and AI cloud services [8][10] Financial Summary - Revenue for 2024 is projected to be 4.65 billion, with a year-on-year growth of 37% [10] - The net profit for 2024 is expected to be -4.048 billion, showing an improvement from -6.440 billion in 2023 [10] - The gross margin is anticipated to improve from 44.07% in 2023 to 53.74% in 2024 [10] Market Performance - The generative AI sector is experiencing rapid growth, with the company capturing a 16% market share in large models, ranking second in the industry [8][10] - The company's AI-driven services are being adopted across various industries, including smart hardware, electric vehicles, and finance, indicating a broadening market presence [8][10] Strategic Developments - The company has successfully transitioned to generative AI, with over 3,000 leading enterprises utilizing its large model and AIDC services [8][10] - The "日日新" large model has undergone significant iterations, achieving a 400% increase in overall usage in H1 2024 [8][10] - The company aims to establish a large model for autonomous driving by 2026, enhancing its position in the smart automotive sector [8][10]

Investment Rating - The report maintains a "Buy" rating for the company [1][3] Core Views - The company reported a revenue of 1.74 billion RMB for the first half of 2024, representing a year-on-year growth of 21.4% [1] - The net loss for the same period was 2.48 billion RMB, which is a 21.2% reduction compared to the previous year [1] - The adjusted EBITDA loss was 1.89 billion RMB, narrowing by 6.7% year-on-year [1] - The company’s cash flow from operating activities showed a net outflow of 3.52 billion RMB, widening the gap by 1.72 billion RMB compared to the same period last year [1] Business Analysis - Revenue from generative AI reached 1.05 billion RMB, growing by 100% year-on-year [2] - Traditional AI revenue fell by 50.6% to 520 million RMB, primarily due to a significant decline in smart city business [2] - Smart vehicle revenue doubled to 170 million RMB, with 705,000 units delivered, marking an 80% increase [2] - The total number of GPUs deployed by the company reached 54,000, with total computing power exceeding 2.0 PFLOPS [2] - The total workforce decreased by 6.9% to 4,672 employees by the end of June 2024 [2] - The company’s financial income increased by 180 million RMB year-on-year, while tax credits decreased by 120 million RMB [2] Profit Forecast, Valuation, and Rating - Projected revenues for 2024, 2025, and 2026 are estimated at 4.24 billion RMB, 5.49 billion RMB, and 6.89 billion RMB, respectively, with growth rates of 24.6%, 29.3%, and 25.5% [3] - Expected net losses for the same years are projected at 4.69 billion RMB, 4.07 billion RMB, and 3.53 billion RMB, with year-on-year reductions of 27.1%, 13.4%, and 13.2% [3] - The company is valued at 9.8x, 7.6x, and 6.0x price-to-sales ratios for the years 2024, 2025, and 2026, respectively [3]

Investment Rating - The report maintains a target price of HK$1.36 for SenseTime, reflecting a 15.3% upside from the current price of HK$1.18 [4]. Core Insights - SenseTime's total revenue for 1H24 grew by 21% YoY to RMB1.74 billion, with an adjusted net loss narrowing by 3% YoY to RMB2.33 billion, indicating improved net loss margin [2][3]. - The generative AI (Gen AI) business is identified as the key growth driver, with revenue increasing by 256% YoY to RMB1.05 billion, accounting for 60% of total revenue in 1H24 [2][3]. - The report anticipates total revenue growth to accelerate to 33% YoY in 2H24, driven by robust demand in the Gen AI sector [2][3]. Financial Performance Summary - Revenue projections for FY24E, FY25E, and FY26E are RMB4.36 billion, RMB5.48 billion, and RMB6.60 billion respectively, with adjusted net losses expected to be RMB3.51 billion, RMB2.52 billion, and RMB1.72 billion [3][5]. - The gross profit margin (GPM) for 1H24 was 44.1%, with expectations of a gradual decline to 38% by FY26E due to increased operational costs [2][5]. - The adjusted net margin improved by 33 percentage points YoY to -134% in 1H24, reflecting operational leverage and cost control [2][5]. Market Position and Competitive Edge - SenseTime has become the third largest AIDC service provider in China with a market share of 15.4% as of 2H23 [2]. - The company has a strong AI infrastructure with operational computing power exceeding 20,000 PetaFLOPS, expected to surpass 25,000 PetaFLOPS by the end of FY24 [2][3]. - The report highlights SenseTime's independence from direct competition with suppliers and clients, enhancing its competitive edge in the Gen AI market [2].

好以下我先来宣读免责声明今天的讨论可能会包含前瞻性陈述前瞻性陈述涉及内在风险及不确定因素可能导致实际业绩偏离当前的预期有关该等风险及不确定因素的详细论述请参阅商舱集团向香港交易所递交的最新公告内容本次会议中所提供的一切前瞻性陈述均基于我们认为截至今日合理的假设 商量集团并不承担更新该等陈述的任何义务除非适用法律定有规定本次讨论还包含某些非国际财务报告准则的财务措施仅供比较之用此外在今天的会议中管理层将以中文做预先准备的发言口译员将在英文会议线路上提供英语同声翻译 详细信息请参阅我们的业绩公告若原话和翻译有出入请以管理层的原话陈述为准稍后徐立博士将首先向大家介绍商汤2024年上半年的整体表现接下来由徐冰介绍集团的业务进展再由王征向大家回顾公司的财务表现 在管理层的讲解之后我们会进行一个简单的问答环节好下面有请徐立博士发言好的谢谢市委也谢谢线上的关注商场的朋友们欢迎大家参加我们2024年的中期业绩的发布会首先这一页我来给大家介绍一下我们上半年的业绩的亮点 这是我们去年实施转向生成式AI的业务重组后的第二次的业绩报告我们也看到了很不错的态势上半年的集团总收入是17.4亿元同比增长了21.4%海外收入同比增长超过40 ...

Financial Performance - For the six months ended June 30, 2024, total revenue reached RMB 1,739.7 million, representing a year-on-year increase of 21.4%[6] - The gross profit for the same period was RMB 766.8 million, with a gross margin of 44.1%, up from 45.3% in the previous year[6] - The company reported a net loss of RMB 2,477.2 million, a reduction of 21.2% compared to the previous year's loss[6] - The adjusted EBITDA for the period was RMB (1,889.6) million, a decrease of 6.7% year-on-year[6] - Operating loss for the six months ended June 30, 2024, was RMB 2,721.5 million, compared to RMB 3,347.3 million for the same period in 2023[26] - Adjusted EBITDA loss improved slightly from RMB 2,025.9 million in 2023 to RMB 1,889.6 million in 2024[26] - The loss for the period was RMB 2,477.2 million, a decrease from RMB 3,142.6 million in the previous year[74] - Total comprehensive loss for the period was RMB 2,405,234 thousand, a decrease from RMB 2,606,540 thousand year-over-year[76] Revenue Breakdown - The revenue from generative AI reached RMB 1,051.2 million, showing a significant growth of 255.7% and accounting for 60.4% of total revenue[7] - The revenue from the "Jueying" smart car business reached RMB 168.1 million in the first half of 2024, representing a year-on-year growth of 100.4%[17] - Revenue increased by 21.4% from RMB 1,433.1 million for the six months ended June 30, 2023, to RMB 1,739.7 million for the six months ended June 30, 2024, driven by growth in generative AI and smart vehicle revenues[27] - Generative AI revenue surged by 255.7%, rising from RMB 295.5 million to RMB 1,051.2 million, accounting for 60.4% of total revenue[27] - Smart vehicle revenue grew by 100.4%, increasing from RMB 83.9 million to RMB 168.1 million, primarily due to increased product production and V2X-related services[28] - Traditional AI revenue declined by 50.6%, falling from RMB 1,053.7 million to RMB 520.4 million, as the company shifted focus from smart city projects to generative AI[28] Operational Highlights - The overseas business revenue grew by 40.1%, contributing 18.5% to the total revenue[7] - The AIDC service's operational capacity exceeded 20,000 PetaFLOPS, up from approximately 12,000 PetaFLOPS at the end of March 2024[11] - The company has over 3,000 industry-leading clients utilizing its large model and AIDC services[10] - The company achieved a market share of 16% in the large model platform sector, ranking second in the industry[8] - SenseTime's AIDC service market share ranks third in the industry, with a projected annual compound growth rate of 57.3%, reaching nearly RMB 200 billion by 2028[12] Research and Development - Research and development expenses increased by 6.1% to RMB 1,892.2 million, with a workforce of 3,399 R&D personnel[7] - The "Riri Xin" model achieved a 400% increase in overall usage during the reporting period, with significant growth in user numbers and average usage per user[14] - The "Riri Xin" model 5.5 version improved overall capabilities by approximately 30% compared to version 5.0, enhancing multi-modal capabilities significantly[14] - The financial model capabilities are being utilized by major clients such as China Bank and China Merchants Bank for various business scenarios[15] - The "Dai Ma" medical model is being implemented in major hospitals, enabling intelligent diagnosis and patient management throughout the medical process[15] Cash Flow and Liquidity - The total cash and cash equivalents as of June 30, 2024, were RMB 7,626.5 million, down from RMB 9,423.5 million as of December 31, 2023, representing a decrease of 19.1%[51] - The net cash used in operating activities for the six months ended June 30, 2024, was RMB (3,523.8) million, compared to RMB (1,804.8) million for the same period in 2023, indicating a significant increase in cash outflow[52] - The net cash used in investing activities for the six months ended June 30, 2024, was RMB (1,068.2) million, primarily due to purchases of property, plant, and equipment[54] - The net cash generated from financing activities for the six months ended June 30, 2024, was RMB 2,722.7 million, mainly from the net proceeds of common stock placements and borrowings[55] Shareholder and Corporate Governance - The company received the "ESG New Benchmark Enterprise Award" for its commitment to sustainable development through AI technology[22] - The company was recognized as one of the "Best Employers" and "Most Digitally Responsible Employers" by Forbes in 2023[24] - The board emphasized the importance of maintaining compliance with international financial reporting standards to ensure transparency[177] - The company is focused on enhancing shareholder value through strategic investments and improved financial performance metrics[178] Future Outlook - The company plans to continue focusing on market expansion and new product development to drive future growth[76] - The company provided a positive outlook for the next quarter, projecting revenue growth of A% based on current market trends and user engagement[178] - New product launches are expected to contribute an additional B million in revenue, with anticipated market expansion into C regions[178] - Market expansion strategies include potential acquisitions, with the company evaluating E targets to strengthen its market position[178] - The company has implemented new strategies to improve operational efficiency, aiming for a reduction in costs by F% over the next fiscal year[178]