Core Insights - Fourth Paradigm reported a revenue of 5.26 billion yuan in 2024, marking a year-on-year growth of 25.1%, with a gross profit of 2.245 billion yuan, up 13.4%, and a narrowed net loss of 269 million yuan, a reduction of 640 million yuan compared to 2023, representing a 70.4% improvement [1] - The company has achieved a consistent reduction in losses for four consecutive years since 2021 and is now the leading pure AI enterprise in both Hong Kong and A-share markets based on revenue [1] - Third-party institutions predict that the company is likely to achieve breakeven by 2025, driven by stable revenue growth, a clear trend of loss reduction, and new business opportunities from AI Agent [1] Business Segments - The enterprise services segment is the core business of Fourth Paradigm, which includes the Prophet AI platform, SHIFT intelligent solutions, and AIGS services [2] - The Prophet AI platform generated 3.676 billion yuan in revenue in 2024, a 46.7% increase year-on-year, and has maintained its leadership in the Chinese machine learning market for six consecutive years, with an average customer revenue of 20 million yuan and a net revenue retention rate (NDR) of 110% [2] - The platform's strategic advantages are becoming more evident, with a customer retention rate exceeding 90%, attributed to strong capabilities and the establishment of usage habits [2] Technological Advancements - Fourth Paradigm is expanding its platform capabilities through enterprise-level Agent solutions, with applications in various verticals such as financial risk control, equipment operation, and smart learning [3] - The company launched an enterprise-level Agent development platform in 2024, collaborating with partners to create general-purpose Agent solutions [3] Market Potential - The AI market is experiencing significant growth, but the current penetration rate remains low, indicating substantial upward potential [4] - Fourth Paradigm's business landscape is evolving, with the introduction of the DeepSeek model and partnerships with major companies for private deployment of AI models [5] Product Innovations - The company has developed an integrated AI model inference solution, SageOne IA, in collaboration with Huawei, achieving full-chain domestic production from chips to services [5] - The SageOne IA solution enhances GPU utilization by over 30% and improves inference performance by 5-10 times [5] Future Growth Areas - Fourth Paradigm is targeting the edge AI market, which is expected to enter a significant development phase by 2025 [7] - The launch of the ModelHub AIoT solution allows users to deploy distilled models easily on the edge, catering to both industrial and consumer sectors [7] - The company has established a consumer electronics brand, Phancy, focusing on providing integrated AI solutions for various smart terminal products [7][8] Financial Outlook - The combination of steady growth in enterprise services and breakthroughs in consumer electronics has created a "dual-engine" growth model for the company [8] - Fourth Paradigm is compared to Palantir, with a significantly lower price-to-sales (PS) ratio, indicating potential undervaluation [8] - With the acceleration of AI Agent commercialization and the expected explosion of the edge AI market, 2025 may mark the company's first profitable year [8]

Core Insights - AI is evolving between training and reasoning cycles, with a growing emphasis on high-quality data acquisition due to increasing costs [1] - The shift of AI from behind the scenes to directly serving consumers is notable, with applications like KIMI and consumer electronics such as AI glasses and headphones emerging [2] - The structure of AI talent has changed significantly, with a surplus of talent now available, presenting new challenges in creating efficient organizational systems [2] Industry Observations - Companies are facing a "hammer and nail" problem, focusing too much on AI technology rather than actual business needs, which can hinder core competitiveness [2] - AI applications must enhance business objectives, such as profit improvement, rather than merely pursuing technological advancement [2] - Companies should prioritize returning to business fundamentals to achieve effective AI implementation [2] Future of AI - The mainstream view suggests that AGI (Artificial General Intelligence) will be realized through AI Agents, but true intelligence should be highly specialized [2] - The concept of AGI should involve an Agent combined with a world model, where the Agent communicates and understands human needs, while the world model uncovers operational patterns in various verticals [3] - Future AGI development is expected to focus on building vertical world models, with Agents collaborating to achieve general intelligence [3]

Investment Rating - The investment rating for the company is "Buy" and is maintained [8] Core Viewpoints - The company reported a significant narrowing of losses, with a revenue of 5.261 billion yuan in 2024, representing a year-on-year growth of 25.1%. The gross profit reached 2.245 billion yuan, up 13.4% year-on-year, while the net loss attributable to shareholders was 269 million yuan, a reduction of 70.4% compared to the previous year's loss of 909 million yuan [2][5] - The company's AI platform, "Xian Zhi," continues to drive rapid growth, achieving a revenue of 3.676 billion yuan in 2024, which is a 46.7% increase year-on-year and accounts for 69.9% of total revenue [9] - The company has entered the consumer electronics sector, launching a new business segment called "Phancy," which aims to provide AI Agent-based hardware and software solutions [9] Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 5.261 billion yuan, a 25.1% increase year-on-year. The gross profit was 2.245 billion yuan, with a gross margin of 42.67%, down from 47.09% the previous year due to changes in revenue structure. The net loss attributable to shareholders was 269 million yuan, significantly reduced from 909 million yuan in the same period last year [2][5] Business Segments - The "Xian Zhi" AI platform generated 3.676 billion yuan in revenue, marking a 46.7% year-on-year growth and representing 69.9% of total revenue. The SHIFT intelligent solutions business saw a revenue of 1.022 billion yuan, down 20.3%, while the AIGS service business generated 563 million yuan, up 35.34% [9] - The company has launched its consumer electronics business, "Phancy," which focuses on AI Agent solutions and has partnered with major brands like Acer and Lenovo [9] Research and Development - The company invested 2.170 billion yuan in R&D in 2024, a 22.7% increase year-on-year, with an R&D expense ratio of 41.2%. Other expense ratios, including sales, management, and financial expenses, have shown a declining trend, contributing to the narrowing of losses [9]

Investment Rating - The report maintains a "Buy-A" rating for the company with a 6-month target price of 71.76 HKD [5][3]. Core Insights - The company reported a revenue of 5.26 billion, a year-on-year increase of 25.1%, and a narrowed net loss of 269 million, a reduction of 70.4% compared to the previous year [1][3]. - The growth in revenue is primarily driven by the "Xian Zhi AI" platform, which generated 3.68 billion in revenue, reflecting a 46.7% increase and accounting for 69.88% of total revenue [1][3]. - The company has strategically upgraded to "Paradigm Group," focusing on both B-end and C-end business segments, with the latter expected to contribute to revenue growth through partnerships in consumer electronics [3][2]. Financial Performance - The gross margin for 2024 was 42.76%, a decrease of 4.41 percentage points, attributed to increased hardware delivery in the AI platform [1]. - The company has demonstrated strong cost control, with sales, management, and R&D expense ratios decreasing by 4.96, 4.46, and 0.83 percentage points, respectively [1]. - Revenue projections for 2025-2027 are estimated at 6.62 billion, 7.89 billion, and 9.20 billion, respectively, with expected net profits turning positive in 2025 [3][8]. Business Strategy - The company is focusing on enhancing customer stickiness through the AI Agent in its B-end services, optimizing key capabilities, and exploring applications in various sectors [2]. - The introduction of the new consumer electronics business segment aims to leverage AI capabilities in products like smart headphones and smartwatches, potentially increasing revenue streams [3][2]. - The company has established a solid customer base, with 161 benchmark clients contributing significantly to revenue, showing a net income growth rate of 110% per client [2].

Investment Rating - The investment rating for the company is "Outperform the Market" [3] Core Views - The company is expected to achieve steady growth with a significant reduction in net losses, driven by strong performance in its core business and the introduction of new product lines [7][8] - The establishment of Paradigm Group marks a strategic shift towards a dual business model focusing on both B2B and B2C markets, with the consumer electronics segment anticipated to become a key growth driver [7][8] Financial Performance and Forecast - Revenue is projected to grow from 42.04 billion in 2023 to 66.01 billion in 2025, reflecting a year-on-year growth of 25% [7] - The net profit is expected to turn positive by 2025, with a forecasted net profit of 0.49 billion, following a significant reduction in losses from 9.09 billion in 2023 to 0.27 billion in 2024 [7] - The gross margin is expected to stabilize around 44% in 2025, with a gradual increase to 47% by 2027 [7] Business Segments and Growth Drivers - The AI platform business, particularly the "Xianzhi AI Platform," has shown exceptional growth, with revenues increasing by 46.7% in 2024 [7] - The company is focusing on expanding its customer base and enhancing service depth, with benchmark users averaging revenue close to 19.1 million [7] - The consumer electronics segment, Phancy, aims to provide AI-integrated hardware and software solutions, leveraging the company's proprietary AI capabilities [7][8] Strategic Initiatives - The company is heavily investing in R&D, with expenses reaching 2.17 billion in 2024, representing 41.2% of revenue [7] - The launch of the ModelHubAIoT solution is expected to facilitate the deployment of AI models on edge devices, addressing privacy and real-time needs [8] - Collaboration with major partners like Huawei to develop integrated AI solutions is anticipated to enhance product offerings and market reach [8] Valuation and Price Target - The company is valued at a price-to-sales ratio of 5-6 times for 2025, with a target price range of 71.66 to 85.99 HKD [8]

Core Insights - Fourth Paradigm reported a total revenue of 5.261 billion yuan for 2024, representing a year-on-year growth of 25.1% [1] - The net loss attributable to the parent company was 269 million yuan, narrowing by 70.4% compared to the previous year [1] - Adjusted net loss was 292 million yuan, with a quarter-on-quarter reduction of 29.6%, marking the fourth consecutive year of reduced losses [1] Financial Performance - The core business, "Prophet AI Platform," generated revenue of 3.676 billion yuan, a year-on-year increase of 46.7%, contributing 69.9% to total revenue [1] - SHIFT Intelligent Solutions and Shishuo AIGS services contributed 1.022 billion yuan and 563 million yuan, with year-on-year changes of -20.3% and 35.4% respectively [1] - As of the end of 2024, the company had liquid cash resources of 2.3 billion yuan, bolstered by a recent new share placement of approximately 1.4 billion HKD [1] Business Development - The company has launched hundreds of AI Agent applications across various sectors, including aircraft design and intelligent vehicle manufacturing [2] - In 2024, Fourth Paradigm introduced an enterprise AI Agent development platform that significantly reduces development time by over 95% [2] - The establishment of Paradigm Group marks a shift towards diversified business development, with a focus on B-end clients and their needs for AI Agent applications [2]

第四范式董事会主席兼首席执行官戴文渊表示，公司收入持续多年增长，减亏成效显著，特别是在2024 年，按归母净亏损计算，减亏幅度超过70%。他表示，预期2025年公司能够维持当前良好态势，收入增 长与亏损缩窄的双重趋势有望得到持续巩固，公司将继续稳步推进既定发展策略。 目前，第四范式已建立了三大主要业务板块：先知AI平台、SHIFT智能解决方案和式说AIGS服务。具 体到各业务板块，先知AI平台表现尤为突出，实现收入36.759亿元，同比增长46.7%。该平台及产品在 总收入中的占比也从2023年的59.6%提升至2024年的69.9%。财报分析认为，这一显著增长主要归因于 整体AI市场需求的持续增长，以及公司在大模型及生成式AI能力方面对产品的有效赋能。 SHIFT智能解决方案在报告期内实现收入10.223亿元，相较于2023年的12.829亿元，出现了20.3%的同比 下降。该解决方案在总收入中的占比也从2023年的30.5%下降至2024年的19.4%。财报指出，这一变化 主要是由于公司业务拓展策略的调整，以及先知AI平台收入占比的显著增加所致。 （原标题：第四范式2024年度业绩：核心业务收入增长46. ...

Core Insights - Fourth Paradigm reported a revenue growth of 25.1% year-on-year, with a narrowed annual loss of 70.4% for 2024 [1][2] - The company emphasized the increasing application of AI Agents across various industries, indicating a significant market potential [1][2] Financial Performance - Total revenue for 2024 reached RMB 5.261 billion, a 25.1% increase compared to the previous year [2] - Gross profit was RMB 2.245 billion, resulting in a gross margin of 42.7% [2] - The annual loss attributable to the parent company was reduced by RMB 640 million, a 70.4% year-on-year improvement [2] AI Agent Development - The company has implemented hundreds of AI Agent applications, with expectations for further market expansion in 2024 [1][2] - The core product, the Prophet platform, saw revenue growth of nearly RMB 1.2 billion, a 46.7% increase from 2023 [2] - Various sectors such as finance, risk control, and smart education have adopted AI Agents, showcasing the technology's versatility [2] Future Outlook - Fourth Paradigm anticipates 2025 to be a pivotal year for edge AI, driven by advancements in large language models and reduced application costs [4] - The development of AI Agents is expected to enhance interaction capabilities, allowing for more complex task execution and broader application across devices [4] - The company aims to leverage technological advancements to explore opportunities in enterprise-level Agents and consumer electronics [5]

Financial Performance - In 2024, the company achieved total revenue of 5.261 billion RMB, a year-on-year increase of 25.1% compared to 4.204 billion RMB in 2023 [2] - The annual loss attributable to the parent company was 268.8 million RMB, a reduction of 70.4% from the previous year's loss of 908.7 million RMB [2] - The gross profit for 2024 was 2.245 billion RMB, representing 42.7% of total revenue, compared to 1.980 billion RMB and 47.1% in 2023 [2] Business Segments - The "Prophet AI Platform" generated revenue of 3.676 billion RMB, accounting for 69.9% of total revenue, with a growth of 46.7% year-on-year [4] - The "SHIFT Intelligent Solutions" business reported revenue of 1.022 billion RMB, a decline of 20.3%, making up 19.4% of total revenue [4] - The "Shisuo AIGS Services" generated 563 million RMB, contributing 10.7% to total revenue [4] Market Trends and Future Outlook - The CEO indicated that the market is transitioning from a large model competition to industry penetration, with AI Agents becoming crucial for implementation [1][4] - There is a growing demand for enterprise-level AI Agents, particularly in high-value industries such as finance, energy, retail, and manufacturing [1][5] - The company anticipates that 2025 will be a pivotal year for the explosion of AI Agents, although market enthusiasm is expected to stabilize by mid-year [1][5] Strategic Direction - The company plans to position itself as a third-party AI technology supplier, providing integrated AI Agent solutions rather than developing proprietary brands [1][11] - The establishment of Paradigm Group will allow the company to diversify its business while maintaining a focus on enterprise services [7][10] - The consumption electronics segment aims to offer AI Agent-based solutions, leveraging the growing capabilities of AI to enhance communication and operational efficiency [10][11] Technology and Innovation - The company emphasizes the importance of AI Agents in transforming enterprise software, enabling better communication and problem-solving capabilities [4][5] - The integration of AI with various devices, including those without screens, is seen as a key factor for the future of AI applications [6] - The company maintains a commitment to developing foundational large models tailored to specific hardware requirements, differentiating itself from competitors [11][12]

Core Insights - Fourth Paradigm (06682) reported strong growth in its overall business for the fiscal year 2024, achieving total revenue of RMB 5.261 billion, a year-on-year increase of 25.1% [1] - The company emphasizes technology research and development, with R&D expenses amounting to RMB 2.170 billion, representing 41.2% of total revenue [1] - The annual loss attributable to the parent company narrowed by RMB 640 million compared to 2023, a reduction of 70.4% [1] Revenue Breakdown - The core business, the "Prophet AI Platform," generated revenue of RMB 3.676 billion, reflecting a year-on-year growth of 46.7% and accounting for 69.9% of total revenue [3] - The SHIFT Intelligent Solutions business generated RMB 1.022 billion, making up 19.4% of total revenue, but saw a year-on-year decline of 20.3% [5] - The "Prophet AI Platform" continues to support the overall business growth, with the "Saying AIGS" service contributing RMB 563 million, or 10.7% of total revenue [5] Technological Advancements - The company launched the "Prophet AI Platform 5.0" in March 2024, enhancing capabilities for vertical world model development and enterprise-level AI applications [2] - The AI Agent capabilities have been improved to solve complex problems with greater precision, reducing development cycles by over 95% [4] - Fourth Paradigm has maintained its position as the market leader in China's machine learning platform sector for six consecutive years, according to IDC [4] Business Expansion - The company is focusing on the "Agent + World Model" dual-core architecture to advance towards General Artificial Intelligence (AGI) [6] - Numerous enterprise-level AI Agent applications have been developed across various industries, enhancing the overall intelligence rate of enterprises [6] - The company has introduced several user-level Agent solutions, such as smart meeting and desktop AI search tools, to improve operational efficiency [7] Product Innovations - The company launched the "SageOne IA" all-in-one model inference solution, which enhances GPU utilization by over 30% and improves inference performance by 5-10 times [7] - The "ModelHub AIoT" solution allows edge devices to run distilled models offline, addressing deployment complexities [8] - Fourth Paradigm is extending its capabilities into consumer electronics, providing AI Agent-based hardware and software solutions [8]