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]

盈利目标清晰。 本文为IPO早知道原创 作者｜ Stone Jin 微信公众号｜ipozaozhidao 据 IPO早知道消息， 第四范式（ 06682.HK） 于 3月3 1 日 公布了 2024年度 业绩报告。 财报显示， 2 024 年第四范式 全年总收入 52.61亿元，同比增长25.1%；毛利润 22.45亿元，毛利 率为42.7% 。 值得一提的是， 2 024 年 全年 第四范式 归属母公司所有者的年度亏损较 2023年全年减亏6.40亿 元，同比 收窄 70.4% ，这也是第四范式自 2021年以来连续4 个 会计年度环比减亏 。 在 盈利目标 日渐 清晰 的同时，第四范式 2 024 年的研发投入为 21.70亿元，研发费用率41.2% ， 继续巩固自己的技术领先性。 2 024 年，第四范式 服务的标杆用户数为 161个，同比增长16%，标杆客户平均营收为 1 910万 元 ， 2024 年标杆用户的NDER（净收入增长率）为110%。 核心业务收入增长 46.7% " 生成式 AI+决策AI"双轮驱动 从业务构成来看， 2 024 年第四范式的核心业务 「先知 AI平台」营收 3 6.7 ...

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]

Financial Performance - Total revenue for the year ended December 31, 2024, reached RMB 5,260.65 million, a year-on-year increase of 25.1%[3] - Gross profit amounted to RMB 2,244.83 million, with a gross margin of 42.7%[3] - The annual loss attributable to the parent company was RMB 268.79 million, a reduction of RMB 640 million compared to 2023, narrowing by 70.4%[4] - Adjusted net loss for the year was RMB 292.47 million, a decrease of RMB 123 million compared to 2023, narrowing by 29.6%[4] - Total revenue for the year ended December 31, 2024, was RMB 5,260,650, an increase of 25.2% compared to RMB 4,204,142 in 2023[30] - Gross profit for the same period was RMB 2,244,829, up 13.4% from RMB 1,979,548 in 2023[30] - The company reported a net loss of RMB 296,267 for 2024, a decrease in loss compared to RMB 920,569 in 2023[32] - The group reported a loss before tax of RMB 290,088,000 for the year ended December 31, 2024, compared to a loss of RMB 930,829,000 for 2023, indicating a significant reduction in losses[56] - The basic and diluted loss per share for the year ended December 31, 2024, was RMB 0.58, down from RMB 2.80 in 2023, reflecting improved performance[61] - Annual loss for the reporting period was approximately RMB 296.3 million, a decrease of 67.8% compared to RMB 920.6 million in the same period of 2023[87] Revenue Sources - Revenue from the 4Paradigm Sage AI platform reached RMB 3,676 million, representing a year-on-year growth of 46.7% and accounting for 69.9% of total revenue[9] - In 2024, the revenue from SHIFT Intelligent Solutions reached RMB 1.022 billion, accounting for 19.4% of the group's total revenue, but saw a year-on-year decline of 20.3% due to strategic business expansion focusing on the AI platform[14] - The AIGS service revenue for 2024 was RMB 563 million, representing 10.7% of the group's total revenue, providing efficient development tools and services based on generative AI[16] - Revenue from a single external customer amounted to RMB 558,295,000, representing about 10.6% of total revenue for the fiscal year ending December 31, 2024, compared to 12.7% in 2023[51] Research and Development - Research and development expenses totaled RMB 2,170 million, with an R&D expense ratio of 41.2%[8] - Research and development expenses rose to RMB 2,169,767, representing a 22.6% increase from RMB 1,768,996 in 2023[30] - The company is focusing on AI agent development to enhance task decomposition and planning capabilities, aiming for comprehensive AI integration in business processes[11] - The company is committed to research and development, particularly in enterprise-level artificial intelligence technologies[128] Operational Strategies - The company continues to expand its customer base and deepen service engagement across various industries, including energy, finance, and transportation[6] - The company has implemented hundreds of agent applications across various sectors, including financial risk control and smart course learning, providing a solid foundation for clients' performance improvement in the AI era[19] - The company continues to iterate and update existing solutions to meet the specific requirements of different vertical scenarios, ensuring accuracy and reliability[15] - The company is actively pursuing strategies for market expansion and potential mergers and acquisitions to enhance its competitive edge[128] Market Position and Future Outlook - The company maintained its position as the leading player in the Chinese machine learning platform market for six consecutive years, according to IDC[70] - The overall revenue from the company's AI platform is expected to grow rapidly as enterprise customers fully adopt agentic AI capabilities[13] - The company predicts that 2025 will be a pivotal year for edge AI, with significant advancements expected in edge AI frameworks and privacy computing technologies[24] - The company believes that the consumer electronics sector will be a key growth driver, transforming traditional devices into AI smart terminals[28] Financial Management - Cash and cash equivalents decreased to RMB 858,618 from RMB 1,977,891 in 2023, a decline of 56.6%[34] - The company manages its cash and working capital through a centralized finance department, implementing policies to enhance financial safety and reduce costs[101] - The company primarily invests in low-risk financial products issued by state-owned banks or reputable financial institutions to manage idle cash[102] Corporate Governance - The company has a strong governance structure with a board of directors comprising both executive and independent non-executive members[126] - The audit committee consists of two independent non-executive directors and one non-executive director, ensuring compliance with applicable accounting standards and regulations[115] - The company has adopted the corporate governance code and has complied with all relevant provisions during the reporting period, except for the separation of the roles of Chairman and CEO[111] Employee and Shareholder Engagement - As of December 31, 2024, the company has a total of 967 employees and provides competitive salaries, bonuses, and equity-based compensation to attract and retain talent[105] - The company has adopted an equity incentive plan on September 19, 2024, which includes restricted share units and a partner employee stockholding plan[106] - The company acknowledges the support and contributions from shareholders, management team, employees, business partners, and customers[118]

陈雨强表示，AI技术正进入推理周期的新阶段，这一转变为中国AI企业提供了巨大的发展机会。在传 统的训练周期中，AI模型依赖大量数据和强大算力进行学习和训练。但随着算力瓶颈的显现，AI的进 化将更加注重推理能力的提升。中国在这一新阶段具备独特优势，特别是在基础模型的突破上。随着推 理能力的提升，中国AI企业不再受制于全球领先的算力资源，而是在丰富的行业数据和技术基础上实 现快速进步。DeepSeek等中国企业在基础模型方面的突破，正是这一转折点的体现。 陈雨强还探讨了AI Agent（智能体）在产业中的应用前景。他指出，AI Agent的出现正在改变To B和To C两端的产业格局。在To B领域，AI Agent让企业和机构能够以更高效的方式使用AI。过去隐藏在菜单 深处的功能，现在只需表达需求即可调用，大大提升了企业运营效率。而在To C领域，陈雨强认为，消 费端的入口可能会发生变化，可调用模型的Agent未来可能成为巨大的流量入口。他以购物为例，说明 消费者从相信搜索引擎到电商App推荐，再到未来可能信任Agent推荐的内容，这一趋势预示着AI Agent 在消费端的巨大潜力。（青山） 然而，他同时指出， ...

开年以来，国产大模型DeepSeek的爆火出圈，让越来越多企业意识到AI在商业中的巨大应 用潜力。深入理解AI如何塑造未来商业，成为每一个企业和管理者必须面对的关键课题。 2025年2月22日，在嘉宾派北京站访学中，校友们一同走进企业级人工智能领军企业第四范 式。第四范式联合创始人、首席科学家陈雨强为大家带来《行业大模型场景落地》的主题授 课，从技术演进的角度讲述了AI的发展逻辑和未来趋势，并通过实际案例阐释了行业大模 型的具体应用。 以下为授课内容精编版，Enjoy~ 最初，人工智能训练仅依靠几万条数据，而如今数据量已增至上千亿条，相当于增长了1亿倍。这一飞 跃不仅让模型的"容量"大大提升，也使得智能系统在面对复杂问题时具备了更强的能力。 欢迎各位嘉宾商学的企业家校友前来第四范式访学，我代公司创始人戴文渊向大家问好。我是第四范式 的联合创始人兼CTO陈雨强，创业前曾在百度和字节跳动任职。 当下，行业最火的莫过于DeepSeek。这些天来，全球同行们都在研究，DeepSeek是如何出现在被美国 技术封锁的中国的？从深层次看，这一现象反映了人工智能技术发展中的周期性变化和不同阶段的表现 特征。 公众最早接触到的 ...

Investment Rating - The report initiates coverage on the company with a "Buy" rating, setting a target price of HKD 64.00, indicating a potential upside of 25.6% from the current price of HKD 50.95 [2][5][17]. Core Insights - The report highlights that the company is positioned as a premium AI stock in the Hong Kong market, with three main highlights constructing its competitive moat [3]. - The company is expected to achieve a revenue compound annual growth rate (CAGR) of 24% from 2024 to 2027, with profitability anticipated to turn positive in 2026 [13][16][33]. Financial Overview - Revenue projections show a steady increase from RMB 3,083 million in 2022 to RMB 8,150 million by 2026, with year-on-year growth rates of 52.7% in 2022, 36.4% in 2023, and expected 24.9% in 2024 [4][19]. - The net profit is projected to improve from a loss of RMB 496 million in 2022 to a profit of RMB 251 million by 2026, indicating a significant turnaround [4][33]. - The company’s gross margin is expected to stabilize around 43-44% in the coming years, with a potential increase if hardware product margins improve [28][32]. Business Highlights - The "XianZhi AI Platform" is central to the company's strategy, having maintained the largest market share in China's machine learning platform sector for six consecutive years [11]. - The company has a diverse industry coverage, including finance, retail, manufacturing, and healthcare, with significant potential for further penetration [12][14]. - The integration of AI Agent technology is expected to enhance product capabilities and operational efficiency, driving further growth [15]. Valuation Insights - The current price corresponds to a price-to-sales (P/S) ratio of 3.8 for 2025, which is below the average P/S ratios of comparable AI companies in both the US and China [17][57]. - The report suggests that the company’s valuation remains attractive, with a target price based on a P/S ratio of 4.5, reflecting the potential for valuation recovery [17][57]. Shareholder Structure and Market Dynamics - Following the unlocking of H shares, the shareholder structure has been optimized, contributing to increased trading volume and market interest [13][67]. - The company was included in the MSCI Global Small Cap Index, which is expected to further enhance its visibility and attractiveness to investors [52][67].

Summary of Conference Call Notes Company and Industry Overview - The discussion revolves around the AI industry, specifically focusing on the company Fourth Paradigm, which has been operational since 2014 and specializes in enterprise-level AI solutions [1][18]. - The company aims to enhance business efficiency and decision-making processes through its AI platforms, particularly the Central AI platform [2][18]. Core Business Strategies and Future Plans - The company plans to maintain its focus on core products, particularly the Central AI platform, while exploring new industries and clients over the next two to three years [2][3]. - There is an emphasis on expanding into new sectors such as industrial manufacturing, which has significant growth potential despite currently low market penetration [3][4]. - The company aims to leverage partnerships with industry-specific players to enhance its service offerings and market reach [13][14]. Financial Performance and Growth Expectations - The company anticipates stable revenue growth, projecting a revenue increase of around 15% annually, with expectations of reaching a revenue scale of 50-60 billion in the near future [21][29]. - The company has maintained a high customer retention rate of over 90% and aims to continue providing high-value AI solutions that yield significant returns on investment for clients [25][26]. Market Trends and Competitive Landscape - The AI market is characterized by rapid changes, with increasing adoption of large models and AI technologies across various sectors [24][25]. - The company differentiates itself from competitors by focusing on tailored AI solutions for specific business scenarios rather than a one-size-fits-all approach [31][32]. - The competitive landscape includes both traditional AI firms and new entrants, with Fourth Paradigm positioning itself as a specialized enterprise AI service provider [30][31]. Challenges and Considerations - The company acknowledges potential fluctuations in client budgets and market conditions, particularly in the B2B sector, but remains confident in its ability to adapt and maintain growth [24][25]. - There is a recognition of the need to balance profitability with continued investment in customer relationships and service quality [28][29]. Additional Insights - The company is exploring international expansion opportunities, particularly in regions like Canada and Southeast Asia, while still focusing on solidifying its domestic market presence [23]. - The discussion highlighted the importance of data governance and quality in AI applications, emphasizing the need for high-quality data to drive effective AI solutions [12][26]. This summary encapsulates the key points discussed during the conference call, providing insights into Fourth Paradigm's strategic direction, market positioning, and financial outlook within the AI industry.

Investment Rating - The report gives the company a "Buy" rating with a target price of HKD 47.20 per share for 2024 [4] Core Views - The company is a leading provider of decision intelligence solutions in China, focusing on platform-centric solutions that help enterprises achieve intelligent transformation [2] - The decision intelligence market is vast and diverse, with generative AI offering significant opportunities for reshaping enterprise software and improving product standardization [2][75] - The company emphasizes commercialization and practical application in specific industry scenarios, avoiding direct competition with giants like OpenAI [2][81] - Generative AI enhances the value proposition for downstream customers, but profitability and market expansion potential remain to be observed [2][82] Financial Projections - Revenue is projected to be RMB 5.076 billion, RMB 5.963 billion, and RMB 7.006 billion for 2024, 2025, and 2026, respectively [3] - The company is expected to achieve positive EBITDA and net profit by 2026, with EBITDA turning positive at RMB 126 million and net profit at RMB 177 million [3] Business Overview - The company offers three main business segments: the Prophet AI Platform, SHIFT Intelligent Solutions, and AIGS services, with the Prophet AI Platform contributing 60% of revenue in 2023 [74] - The company has developed four core technologies: automated machine learning, transfer learning, environmental learning, and automated reinforcement learning, which are widely applied in its decision intelligence solutions [113] - The company has expanded its industry coverage, with financial and energy sectors being its strongholds, while manufacturing, retail, and healthcare sectors show growth potential [126] Market and Industry Analysis - Decision intelligence is a typical application scenario for generative AI, with large language models (LLMs) empowering the entire decision-making process [147][148] - The decision intelligence platform market is highly competitive, with participants ranging from vertical industry solution providers to cross-industry technology suppliers [158] - In China, the company leads the decision AI market with a 22.6% market share, ahead of major internet companies like Baidu, Alibaba, Huawei, and Tencent [160][163] Competitive Analysis - The company is compared with Palantir, a global leader in big data analytics, with both companies leveraging generative AI to enhance their decision intelligence platforms [191] - While Palantir focuses on real-time decision-making platforms and global high-value clients, the company emphasizes industry-specific models and localized solutions for the Chinese market [80] Growth Strategy - The company adopts a "Prophet Inside" model, embedding its AI platform capabilities into industry-specific products and solutions, which aligns with the trend of product standardization driven by generative AI [178][181] - The company collaborates with ecosystem partners to expand its industry applications, covering over 20 industries and various scenarios, which is expected to drive future growth [182]