Core Viewpoint - Goldman Sachs reports that Mingyuan Cloud's performance in the second half of 2024 is expected to be below expectations due to continued weak demand from real estate developers, maintaining a neutral rating with a 12-month target price of HKD 2.00 [1] Group 1: Financial Performance - Revenue for the second half of 2024 is projected to decline by 19% year-on-year to RMB 715 million, which is 14% lower than Goldman Sachs' expectations [1] - Gross margin decreased by 5.7 percentage points year-on-year and 6.8 percentage points quarter-on-quarter, primarily due to a significant reduction in orders [1] - Adjusted net loss reached RMB 27 million, which is better than Goldman Sachs' forecasted adjusted net profit loss of RMB 35 million [1] Group 2: Business Segment Analysis - Cloud SaaS/PaaS revenue declined by 17% year-on-year, with property management and operation SaaS revenue increasing by 3%, offset by declines in CRM SaaS, construction management SaaS, and Skyline PaaS revenue, which fell by 12%, 36%, and 36% respectively [1][2] - The decline in revenue is attributed to a decrease in new construction projects in the real estate sector and reduced demand from budget-constrained developers [1] - The number of sales offices covered by CRM Cloud decreased by 9% year-on-year, while the average revenue per user (ARPU) for CRM Cloud increased by 3% [1] Group 3: Software Business and AI Initiatives - Revenue from on-premise software business declined by 24% year-on-year, primarily due to conservative IT spending by private developers [2] - The company has launched several AI products for real estate video marketing, including AI Creative Factory and AI Salesperson, with contract amounts for AI products reaching RMB 28 million in 2024 [2] - CRM Cloud is expanding its AI-supported video marketing services into real estate brokerage, automotive, and home decoration sectors [2]

Investment Rating - The report assigns an "Outperform" rating to the company, indicating an expectation of relative performance exceeding the market benchmark by over 10% within six months following the report's release [12]. Core Insights - The company is positioned as a leader in digital technology for real estate, focusing on AI and SaaS to unlock new growth opportunities [12]. - The report highlights a significant narrowing of net losses due to effective cost reduction measures, with a projected revenue decline of 12.5% in 2024, but a substantial reduction in adjusted net loss by 74.1% [8][12]. - The transition in the real estate industry from "incremental development" to a dual model of "incremental development + stock operation & management" is noted, impacting digital demand [8][12]. Financial Data and Forecasts - Revenue projections for the company are as follows: - 2023: 1,657 million RMB - 2024: 1,435 million RMB (down 9.6% YoY) - 2025E: 1,365 million RMB (down 12.5% YoY) - 2026E: 1,392 million RMB (up 2.0% YoY) - 2027E: 1,472 million RMB (up 5.7% YoY) [7][11]. - Net profit forecasts indicate a significant recovery, with expected figures of: - 2024: -190 million RMB - 2025E: -146 million RMB - 2026E: -73 million RMB - 2027E: 36 million RMB [7][11]. - The overall gross margin is projected to improve from 76.85% in 2024 to 79.17% in 2027, driven by an increase in SaaS revenue share [11][12]. Business Segmentation - The company's SaaS revenue is expected to decline slightly in 2024 but is projected to grow in subsequent years, with a forecast of 12.93 million RMB by 2027 [11]. - The ERP business is anticipated to continue its strategic contraction, with revenue growth rates of -15% in 2025, -8% in 2026, and -5% in 2027 [11]. - The report emphasizes the integration of AI into real estate marketing, with the launch of specialized AI products and a significant increase in client engagement [8][12]. Market Performance - The company's stock price is currently at 3.00 RMB, with a market capitalization of 5,832 million RMB [3]. - The report notes a 52-week price range of 1.57 to 4.65 RMB, indicating volatility in the stock's performance [3].

Core Insights - Mingyuan Cloud Group Holdings Limited (00909.HK) held its 2024 annual performance conference, discussing financial performance and operational strategies, particularly in AI and international expansion [1] - The company is positioned as a leader in digital solutions for the real estate ecosystem, focusing on "AI + Real Estate" as its core strategy to drive digital transformation [1] - Mingyuan Cloud's AI products have seen significant uptake, with a 2.7% year-on-year increase in the average project unit price for its cloud sales offices, reaching RMB 77,000 per unit in 2024 [1] Financial Performance - The company reported a total signed amount of RMB 28 million for its cloud AI products in 2024, with clients including major real estate firms like Poly Developments and China Overseas Land & Investment [2] - The number of real estate sales offices covered by Mingyuan Cloud's AI products has approached 1,000 [2] AI Product Development - Mingyuan Cloud has developed a comprehensive product matrix in the AI + marketing sector, addressing various business scenarios in real estate marketing [2] - Approximately 30% of the core functionalities of its AI products utilize the DeepSeek series of domestic large models [2] International Expansion - The company has accelerated its overseas market expansion since 2024, establishing localized teams in regions such as Hong Kong, Singapore, Malaysia, Indonesia, and Japan [2] - Mingyuan Cloud has signed contracts with local real estate clients, accumulating nearly RMB 10 million in signed amounts, with some projects already delivered [2] - The company plans to continue expanding in Hong Kong, Southeast Asia, and Japan, while exploring opportunities in the Middle East and North America [2] Product Strategy - The company has adopted an "AI + IoT + SaaS" product strategy tailored to the needs of overseas markets, focusing on innovation in AI [3] - An example of this strategy is the implementation of AI and IoT for real-time monitoring and safety management on construction sites, which has received positive feedback in international markets [3] Investment and Partnerships - Mingyuan Cloud is considering increasing investments in quality partners in target regions to foster mutually beneficial relationships, particularly in real estate technology companies with strong local resources [3] - The company has made small-scale investments in the Japanese market to leverage local innovation capabilities and market resources [3] Market Conditions - According to research from Zhongtai Securities, the real estate and construction industry is still in a downward adjustment phase, with continued low capital expenditure from downstream clients [3] - Mingyuan Cloud is actively reducing costs and controlling expenses, which is expected to lead to a quicker recovery of profits and cash flow [3]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The report indicates that as the pressure in the real estate market eases, the company's revenue is expected to recover, driven by effective cost control and growth in AI and overseas business [6][7] - The adjusted net profit forecasts for 2025-2026 have been revised from -310 million/-280 million to -30 million/+50 million, with a new forecast for 2027 net profit at 120 million [6] - The current stock price corresponds to a PS valuation of 3.8/3.7/3.4 times and an adjusted net profit PE valuation of 64.8/39.6/26.7 times [6] Financial Performance Summary - In 2024, the company's revenue is projected to be 1.44 billion, a year-on-year decline of 12.5%, while the adjusted profit loss is expected to narrow to 40 million from 170 million in 2023 [7] - The revenue from local deployment/SaaS is expected to decline by 20.4%/10.7% due to weak real estate conditions and the company’s decision to forgo less profitable orders [7] - The gross margin is expected to decrease by 2.6 percentage points due to industry pressures and an increase in third-party procurement in cloud services [7] Business Segment Analysis - CRM revenue is expected to decline by 9% year-on-year, while the average revenue per user (ARPU) is projected to increase by 2.7% due to AI module contributions [8] - The engineering construction segment is expected to see a revenue decline of 20.6%, but state-owned enterprise clients are maintaining stable digital investments, leading to a 40.9% increase in the number of projects and a 4.3% increase in ARPU [8] - The asset management and operations segment is expected to grow by 14.2% year-on-year, driven by strong demand from state-owned platform companies [8] AI Business Potential - The AI business has shown promising results, with a cumulative contract value of approximately 28 million for cloud AI, indicating significant growth potential [8] - The company’s AI strategy involves a differentiated approach using AI+IoT+SaaS, allowing it to cover the entire real estate scenario and maintain a competitive edge [8]

Investment Rating - The investment rating for the company is "Increase" [2][4] Core Views - The company is experiencing a decline in revenue due to a sluggish real estate market, with a projected revenue of 1.38 billion in 2025, down from 1.43 billion in 2024, reflecting a decrease of 4% [2][4] - The adjusted net profit is expected to improve significantly, moving from a loss of 190 million in 2024 to a profit of 30 million in 2025, indicating a growth rate of 85% [2][4] - The company is focusing on enhancing its SaaS products through AI technology and expanding its presence in overseas markets, which is expected to create new growth opportunities [3][4] Financial Forecasts - Revenue projections for 2025, 2026, and 2027 are 1.38 billion, 1.43 billion, and 1.55 billion respectively, with growth rates of -4%, 3%, and 9% [2][4] - The company anticipates a net profit of -28 million in 2025, followed by a profit of 30 million in 2026 and 123 million in 2027, showing a significant recovery trajectory [2][4] - The earnings per share (EPS) is expected to improve from -0.10 in 2024 to 0.06 in 2027 [2][4] Business Strategy - The company is shifting its focus towards asset management and operations in the real estate sector, which is expected to yield positive results despite the overall market downturn [3][4] - The introduction of AI-driven products is aimed at enhancing marketing capabilities in the real estate sector, with significant contracts already signed with major developers [3][4] - The company is actively expanding its international market presence, particularly in regions like Japan, Hong Kong, and Southeast Asia, to tap into diverse real estate opportunities [3][4]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The report indicates that as the pressure in the real estate market eases, the company's revenue is expected to recover, driven by effective cost control and growth in AI and overseas business [6] - Adjusted net profit forecasts for 2025-2026 have been revised from -310 million/-280 million to -30 million/+50 million, with a new forecast for 2027 net profit at 120 million [6] - The current stock price corresponds to a PS valuation of 3.8/3.7/3.4 times and an adjusted net profit PE valuation of 64.8/39.6/26.7 times [6] Financial Performance Summary - In 2024, the company's revenue is projected to be 1.44 billion, a year-on-year decline of 12.5%, while adjusted profit loss is expected to narrow to 40 million from 170 million in 2023 [7] - The revenue from local deployment/SaaS is expected to decline by 20.4%/10.7% due to weak real estate conditions and the company’s decision to forgo less profitable orders [7] - The gross margin is expected to decrease by 2.6 percentage points due to industry pressures and an increase in third-party procurement in cloud services [7] Business Segment Performance - In 2024, the CRM segment is expected to see a revenue decline of 9%, while the engineering construction segment is projected to decline by 20.6% [8] - The asset management and operations segment is expected to grow by 14.2%, driven by strong demand from state-owned enterprises [8] - The company has signed contracts worth approximately 28 million for its AI business, indicating significant growth potential [8] Financial Metrics - The projected operating revenue for 2025 is 1.435 billion, with a year-on-year change of 0.0% [8] - The net profit for 2025 is expected to be -30 million, improving from -190 million in 2024 [8] - The gross margin is projected to stabilize around 77.4% in 2025, with a net margin of -2.1% [8]

Core Viewpoint - Mingyuan Cloud has shown a significant recovery trend in profitability, with its asset management business becoming a new growth driver despite challenges in the real estate sector and infrastructure investment slowdown [1][2]. Financial Performance - In 2024, Mingyuan Cloud achieved total revenue of 1.435 billion RMB, a year-on-year decrease of 12.5% [1]. - Revenue from cloud services and localized deployment fell by 10.7% and 20.4% respectively [1]. - The asset management and operation business under cloud services saw a revenue increase of 14.2% year-on-year, indicating the strategic foresight of the company's focus on digitalization of existing assets [1]. Profitability - The company reported a net loss attributable to shareholders of 190 million RMB in 2024, an improvement from a loss of 598 million RMB in the previous year [1]. - Adjusted net loss, excluding non-cash factors, was 43.96 million RMB, a reduction of 74.1% [1]. Cost Management and Efficiency - Total expenses, excluding share-based payments, decreased by 19.7% in 2024, with per capita output increasing by 14.7% [2]. - Management, R&D, and marketing expenses fell by 19.1%, 25.4%, and 15.7% respectively [2]. - The asset-liability ratio was 13.68%, down 2.01 percentage points from the previous year, indicating improved financial stability [2]. Product Development and Market Position - Mingyuan Cloud has developed a robust product matrix in the AI+ marketing field, addressing various pain points in real estate marketing [3]. - The cumulative contract amount for the cloud AI products reached 28 million RMB, covering nearly 1,000 real estate sales offices [3]. - The company holds a cash reserve of 4.042 billion RMB at the end of 2024, ensuring a solid financial foundation for strategic initiatives [3].

Summary of the Conference Call for Mingyuan Cloud Company Overview - Mingyuan Cloud reported a 12.5% decline in overall revenue for 2024, with net profit decreasing by 67.7%. Adjusted net loss, excluding equity payment factors, was 44 million yuan, a significant reduction of 74.1% year-on-year [3][4][3]. - The decline in revenue was primarily due to the macroeconomic impact on the real estate market, particularly in the real estate development business, where the number of new projects decreased by approximately 20% and sales dropped by over 10% [3][4][3]. Key Financial Performance - Despite the overall revenue decline, the asset management and operations product line performed well, generating nearly 100 million yuan in revenue and showing growth [4][3]. - Overall expenses decreased by over 10%, with three expense categories dropping between 15% to 25%. The workforce was reduced to 1,900 employees, a 25% decrease, leading to an increase in per capita output [3][4][3]. - The company maintained a healthy financial position with a low debt-to-asset ratio and a provision rate for bad debts on accounts receivable above 40% [3][4][3]. - Operating cash flow for 2024 was approximately 70 million yuan, primarily due to performance bonuses distributed in the first half of the year. Year-end cash reserves reached 4.268 billion yuan, providing a safety net against market fluctuations [3][4][3]. Business Lines and Growth Areas - The cloud CRM product line showed resilience with a single-digit revenue decline, while the average transaction price increased. AI product commercialization reached a contract value of 28 million yuan, covering 1,300 real estate projects, indicating significant growth potential [4][6][4]. - The project construction business is undergoing structural adjustments, focusing more on state-owned enterprise (SOE) clients, which increased in proportion, leading to a 4.3% rise in average project price despite a 20.7% revenue decline [4][7][4]. - Asset management and operations are highlighted as growth areas, with nearly 100 million yuan in revenue and continuous growth, targeting SOE clients [4][7][4]. Market Outlook - For 2025, the company anticipates a slight decline in domestic market revenue but expects rapid growth in overseas markets, resulting in relatively minor overall revenue pressure. Sales expenses are projected to decrease by over 10%, with operating net profit and cash flow expected to turn positive [4][14][4]. - The company plans to continue optimizing its business structure and strengthen collaborations with state-owned enterprises [3][4][3]. AI and Technology Integration - The company is focusing on AI and marketing, with recorded contract values between 23 million to 28 million yuan and plans to launch more standalone SKUs [4][13][4]. - AI products are being integrated into various business lines, enhancing customer acquisition capabilities and increasing project transaction prices [4][20][4]. - The integration of AI with IoT and existing SaaS products is expected to enhance product interactivity and data collection capabilities, providing a competitive advantage in the real estate sector [4][28][4]. International Strategy - Mingyuan Cloud is prioritizing partnerships with local tech companies in overseas markets, particularly in Southeast Asia, Japan, and Hong Kong, with a goal of achieving significant growth in these regions [4][12][4]. - The company aims to provide lightweight, understandable SaaS products combined with AI and IoT capabilities, such as safety management systems for construction sites [4][22][4]. Conclusion - Mingyuan Cloud is navigating a challenging domestic market while strategically positioning itself for growth in international markets and leveraging AI technology to enhance its product offerings and operational efficiency [4][27][4].

Core Viewpoint - Mingyuan Cloud's chairman Gao Yu stated that the most challenging times have passed, and the company will focus on high-quality clients and AI innovation moving forward [3]. Financial Performance - For the fiscal year 2024, Mingyuan Cloud reported total revenue of 1.435 billion RMB, a decrease of 12.5% year-on-year [5][6]. - The company incurred a loss of approximately 190 million RMB, which is a 67.7% reduction compared to the previous year [3][5]. - Adjusted net loss was 43.96 million RMB, down 74.1% year-on-year [3][5]. Business Segments - The cloud service revenue declined by 10.7% to 1.195 billion RMB, accounting for 83.3% of total revenue [6]. - The customer relationship management product line, "Yunke," generated revenue of 859 million RMB, a decrease of 9.2% year-on-year [6]. - The asset management and operation product line recorded 99.8 million RMB, showing a growth of 14.2% [9]. AI and Innovation - The cumulative signed amount for the AI product "Yunke" reached nearly 28 million RMB, adopted by major real estate companies [3][6]. - The company anticipates a three-digit growth in paid income from AI commercial products in the real estate sector [3]. Market Outlook - Gao Yu expressed optimism about the recovery of the real estate market, noting that the probability of a significant further decline is low [9]. - The company plans to enhance profitability by focusing on core products and establishing better relationships with state-owned and quality private enterprises [12]. Strategic Initiatives - Mingyuan Cloud is launching an overseas market strategy, targeting regions such as Japan, Singapore, Malaysia, and Indonesia, with a direct sales team exceeding 300 members [13]. - The company aims to develop AI+/AIOT SaaS products and explore opportunities in the Middle East and North America [13].

Core Insights - Mingyuan Cloud reported a revenue of 1.435 billion yuan for the year 2024, a decrease of 12.5% year-on-year due to adjustments in the real estate industry [1] - The adjusted net loss narrowed to 43.96 million yuan, a 74.1% decrease from the previous year's loss of 170 million yuan [1] - The company maintained a strong cash reserve of 4.042 billion yuan and a stable asset-liability structure [1] Revenue and Growth Areas - Despite a reduction in new projects in the industry, Mingyuan Cloud increased investment in digital management of existing assets, resulting in a 14.2% revenue growth in asset management and operation product lines, reaching 99.75 million yuan [1] - The company has partnered with over 230 state-owned enterprise investment platform companies, focusing on industrial park operations and affordable housing [1] - AI technology applications led to the launch of multiple real estate video marketing AI products, achieving a total contract value of nearly 28 million yuan, covering around 1,000 sales offices nationwide [1] Cost Control and Efficiency - Mingyuan Cloud effectively controlled costs through optimized product resource allocation, organizational restructuring, and AI-assisted R&D processes [2] - Sales expenses decreased by 17.8%, management expenses dropped by 53.0%, and R&D expenses fell by 25.0% [2] - The productivity per employee increased from 557,000 yuan to 639,000 yuan year-on-year [2] Shareholder Returns - The board of directors proposed a special dividend of 0.1 Hong Kong dollars per share to shareholders from the company's premium account [2]