Core Viewpoints - The company's core business drives high-quality revenue growth, achieving revenue of RMB 5.261 billion in 2024, a year-on-year increase of 25.1%, with the "Prophet AI Platform" contributing RMB 3.676 billion, a significant growth of 46.7%, accounting for 69.9% of total revenue. Meanwhile, the net profit attributable to the parent company narrowed its loss to RMB -269 million, a substantial reduction of 70.4% [1][2] - The company has a high customer stickiness among industry-leading clients, with the number of benchmark clients increasing by 16% to 161, an average revenue contribution of RMB 19.1 million, and a net retention rate (NDER) of 110%. The company has launched an AI Agent collaborative operation solution in partnership with Zhiyuan Interconnect, integrating the AI Prophet platform with the AICOP platform [1][2] - The company upgraded its group structure and launched the "Phancy" brand to provide C-end AI capabilities in addition to its B-end business. The ModelHub AIoT solution supports the deployment of large models on local devices, offering low-latency and high-privacy edge AI services, collaborating with brands like Lenovo to enhance the deployment of Agents on the edge [1][2] Financial Performance - In 2024, the company reported a total revenue of RMB 5.261 billion, a year-on-year increase of 25.1%, with a gross profit of RMB 2.245 billion and a gross margin of 42.7%. The net profit attributable to the parent company improved to RMB -269 million, a significant reduction of 70.4% [1][2] - The core business revenue and profit both grew rapidly, with the "Prophet AI Platform" achieving revenue of RMB 3.676 billion, a year-on-year increase of 46.7%, and accounting for 69.9% of total revenue. The company's R&D investment reached RMB 2.170 billion, with an R&D expense ratio of 41.2% [1][2] Business Segments - The core business structure remains coordinated across three major segments: the Prophet AI Platform, SHIFT Intelligent Solutions, and Shisuo AIGS Services. In 2024, the Prophet AI Platform generated revenue of RMB 3.676 billion, a year-on-year increase of 46.7%, while SHIFT Intelligent Solutions revenue decreased by 20.3% to RMB 1.022 billion due to resource focus on the AI platform strategy [2][3] - The SHIFT Intelligent Solutions provide intelligent solutions for various industries, further deepening industry applications and accelerating digital transformation. The Shisuo AIGS Services empower software development through generative AI technology, enhancing user experience and product capabilities [3][4] Customer Base and Market Position - The number of benchmark users reached 161 in 2024, a 16% increase year-on-year, with an average revenue contribution of RMB 19.1 million. The customer concentration risk has been effectively mitigated, with the largest single customer revenue share decreasing from 12.7% in 2023 to 10.6% in 2024 [4][5] - The company has helped over 10 industries develop and deploy enterprise-level AI Agents, with practical experience in various verticals such as financial credit risk control and water and electricity equipment operation [4][5] Strategic Developments - The company completed a group structure upgrade and officially rebranded as "Paradigm Group," with its enterprise-level AI business becoming the core B-end brand. The launch of the Phancy brand focuses on "AI Agent + World Model" technology, providing edge AI capabilities to both consumer and industrial sectors [5][6] - The ModelHub AIoT solution supports local deployment of distilled models, achieving low-latency and high-privacy edge AI services, and has collaborated with brands like Acer and Lenovo to upgrade traditional devices into AI terminals [5][6] Profit Forecast - As a leader in enterprise-level AI, the company has seen continuous revenue growth and narrowing net losses, with a clearer profit model. The number of benchmark clients and revenue are steadily increasing, with projections for 2025-2027 revenues of RMB 6.663 billion, RMB 8.347 billion, and RMB 10.413 billion, representing year-on-year growth rates of 26.66%, 25.26%, and 24.77% respectively [5][6]

Core Insights - Fourth Paradigm (06682.HK) reported a total revenue of RMB 1.077 billion for Q1 FY2025, marking a year-on-year growth of 30.1% [2] - The gross profit reached RMB 444 million, also reflecting a 30.1% increase, with a gross margin of 41.2% [2] - The core business, the Prophet AI platform, generated revenue of RMB 805 million, showing a significant year-on-year growth of 60.5% [2] Business Expansion - The Prophet platform underwent a major upgrade, introducing an AI Agent full-process development platform, allowing enterprise clients to integrate over 150 mainstream large models [3] - The platform includes a comprehensive suite of AI applications covering various enterprise scenarios such as AIGC, intelligent office, digital employees, and more [3] - The AI Agent has been implemented in over 14 industries, including finance, aviation, automotive, healthcare, and retail [3] Revenue Breakdown - The SHIFT intelligent solutions business generated RMB 212 million, accounting for 19.7% of total revenue, despite a year-on-year decline of 14.9% [4] - The AIGS service revenue was RMB 60 million, representing 5.6% of total revenue, with enhancements in programming Agent capabilities [4] Strategic Focus - The company is focusing on enhancing the core capabilities of the Prophet AI platform and the deployment of enterprise-level Agents, leading to a strategic resource reallocation [4] - The company has established a dual-core business structure, maintaining its enterprise services while launching a consumer electronics segment, Phancy, which focuses on integrated AI Agent solutions [6] - Phancy has released several user-level Agent solutions aimed at improving daily work efficiency for enterprise users [6]

Core Insights - The company reported a total revenue of 1.077 billion yuan for Q1 of the 2025 fiscal year, representing a year-on-year growth of 30.1% [1] - The gross profit for the same period was 444 million yuan, also reflecting a 30.1% increase, with a gross margin of 41.2% [1] Revenue Breakdown - The "Prophet AI Platform" generated revenue of 805 million yuan, marking a significant year-on-year growth of 60.5%, and accounted for 74.8% of the total revenue [1] - The "SHIFT Intelligent Solutions" segment saw a revenue decline of 14.9%, bringing in 212 million yuan, which constituted 19.7% of total revenue [1] - The "Shisuo AIGS Services" contributed 60 million yuan, making up 5.6% of the overall revenue [1] R&D Investment - Research and development expenses for Q1 amounted to 368 million yuan, an increase of 5.7% year-on-year, with an R&D expense ratio of 34.2%, down 8 percentage points from the previous year [1] New Business Initiatives - The company announced the establishment of the Paradigm Group, with the original business becoming a core subsidiary, aiming for diversification rather than a shift from enterprise services to consumer electronics [2] - A new business segment, Phancy, was introduced, focusing on providing AI Agent-based integrated software and hardware solutions for electronic products [2] - The performance of the Phancy segment was not disclosed in the recent financial report, but it aims to empower consumer electronics manufacturers to integrate AI capabilities more easily and cost-effectively [3]

期间，得益于持续推进客户群体的多元化，公司标杆用户数达到59个。在拓展客户数量的同时，公司高 度关注客户高价值场景的深度挖掘，并进一步提高公司的产品黏性。本期间，公司标杆用户平均营收贡 献为人民币11.67百万元，同比增长31.3%。 基于AI agent+世界模型的核心理念，本期间，公司正在进行集团化及品牌升级。在范式集团成立之 际，现有的企业服务业务(4Paradigm)将成为范式集团的核心子业务。范式集团秉持通用人工智能(AGI) 的理想，通过「AIagent+世界模型」的技术路径，不断提升AIagent沟通能力，并丰富世界模型对各垂 直细分领域的认知，提升AI解决垂直领域的能力，进而推动AGI的实现。 与此同时，范式集团成立了全新的消费电子业务板块Phancy，定位是向市场提供基于AI agent的软硬件 一体解决方案，通过智能体模组在端侧提供AI agent能力。公司始终坚持开放的技术合作心态，致力于 帮助各类AI终端设备厂商轻松打造AI终端产品。未来，通过范式集团的端侧AI模组，公司希望能够赋 能各消费电子厂商，快速集成AI能力，以更低门槛、更低成本推出受到各自用户喜爱的AI终端产品。 格隆汇5月 ...

Core Viewpoint - The company reported a total revenue of 1.077 billion RMB in the first quarter, reflecting a year-on-year growth of 30.1% [1] Group 1: Financial Performance - Total revenue for the first quarter reached 1.077 billion RMB, marking a 30.1% increase compared to the same period last year [1] - Gross profit amounted to 444 million RMB, also showing a year-on-year growth of 30.1% [1] Group 2: Business Segments - Revenue from the company's XianZhi AI platform was 805 million RMB, which represents a significant year-on-year increase of 60.5% [1] - The XianZhi AI platform's revenue accounted for 74.8% of the total revenue of the group [1]

Financial Performance - Total revenue for 2024 reached RMB 5.26 billion, a year-on-year increase of 25.1% compared to RMB 4.20 billion in 2023[6] - Gross profit for 2024 was RMB 2.24 billion, with a gross margin of 42.7%, down from 47.1% in 2023[6] - The annual loss attributable to the parent company was RMB 268.79 million, a reduction of RMB 640 million or 70.4% compared to 2023[6] - Adjusted net loss for the year was RMB 292.47 million, a decrease of RMB 123 million or 29.6% from the previous year[6] - Revenue from the Fourth Paradigm's AI platform business reached RMB 3.68 billion, a significant increase of 46.7% year-on-year[9] - The SHIFT intelligent solutions business generated revenue of RMB 1.022 billion in 2024, which is a year-on-year decline of 20.3%, representing 19.4% of total group revenue[15] - The 4Paradigm AIGS service business reported revenue of RMB 563 million in 2024, contributing 10.7% to total group revenue[16] - Revenue from the Prophet AI platform reached RMB 3,675.9 million, up 46.7% year-on-year, accounting for 69.9% of total revenue, compared to 59.6% in 2023[29] - Revenue from SHIFT intelligent solutions decreased by 20.3% year-on-year to RMB 1,022.3 million, representing 19.4% of total revenue, down from 30.5% in 2023[30] - Revenue from the Shisuo AIGS service increased by 35.4% year-on-year to RMB 562.5 million, accounting for 10.7% of total revenue, up from 9.9% in 2023[31] Market Position and Strategy - The company has maintained the largest market share in China's machine learning platform market for six consecutive years, according to IDC[9] - The company aims for clear profitability targets moving forward, with a focus on technology innovation and application expansion[9] - The strategic implementation of "AI agent + vertical world model" has accelerated the deployment of ecosystem products, driving business growth[9] - The company has successfully deployed hundreds of AI agent applications across various industries, including finance, energy, and education[18] - The company is collaborating with consumer electronics manufacturers to develop AI-enabled products, positioning this sector as a key growth driver[24] Research and Development - Research and development expenses for the period amounted to RMB 2.17 billion, with a research and development expense ratio of 41.2%[10] - The company is investing $50 million in research and development for new technologies aimed at enhancing user experience[5] - Approximately 60% of the net proceeds from the global offering, amounting to approximately HKD 555.4 million, will be used to enhance research, technical capabilities, and solution development[113] User and Customer Metrics - The number of benchmark users served by the company in 2024 is 161, representing a year-on-year growth of 16%, with an average revenue of RMB 19.1 million per benchmark user[10] - The average net income growth rate (NDER) for benchmark users in 2024 is projected at 110%[10][11] - As of December 31, 2024, revenue from the top five customers accounted for 41.6% of the company's total revenue, with the largest customer contributing 10.6%[176] Financial Health and Assets - Non-current assets increased to RMB 1.90 billion in 2024, up from RMB 1.49 billion in 2023[7] - Total assets grew to RMB 7.59 billion in 2024, compared to RMB 7.15 billion in 2023[7] - Current cash resources were approximately RMB 23,010,000,000 as of December 31, 2024, down from RMB 32,953,000,000 in 2023[52] - The company's debt-to-equity ratio improved to approximately 0.1% as of December 31, 2024, from 2.0% in 2023, indicating a more robust capital structure[54] Corporate Governance and Compliance - The board of directors emphasized the importance of corporate governance and strategic oversight in driving future growth[10] - The company has adopted the corporate governance code and has complied with all applicable provisions, except for the separation of the roles of Chairman and CEO[193][194] - The board of directors is committed to maintaining high standards of corporate governance and regularly reviews its governance practices[195][198] - The independent non-executive directors have confirmed their independence according to the listing rules[122] Employee and Shareholder Information - As of December 31, 2024, the total employee cost for the group was approximately RMB 447.2 million, down from 1,801 employees in 2023 to 967 employees[143] - The equity incentive plan approved on September 19, 2024, allows for a total of 23,283,271 shares to be granted, representing 4.72% of the company's issued shares as of the report date[148] - The company has a significant ownership structure, with Dr. Dai holding approximately 53.38% of the domestic shares and 22.79% of the total equity[124] Risks and Challenges - The company faces significant risks including the evolving nature of artificial intelligence technology and the potential inability to retain key personnel[109] - The company may be subject to complex and evolving privacy and data protection laws, which could impact its reputation and operations[112] Social Responsibility - The company is committed to fulfilling social responsibilities and improving employee welfare while promoting sustainable growth in 2024[106] - The company made charitable donations totaling RMB 200,000 during the reporting period[181]

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].