Investment Rating - The report maintains a positive investment outlook for the AI+Education industry, particularly highlighting companies with strong research and product capabilities that are early adopters of AI technology [2][3]. Core Insights - The AI+Education sector is experiencing significant growth, driven by advancements in AI technology, supportive policies, and a strong demand for personalized learning solutions. Companies like Duolingo and Bean Education are leading the way with innovative AI features that enhance user experience and increase user value [2][7]. - The report emphasizes the importance of both hardware and software applications in the AI+Education landscape, noting that the integration of AI into educational tools is expanding rapidly across various learning scenarios [46][62]. Summary by Sections Industry Overview - The AI+Education industry is evolving from traditional online education, with a clear trajectory towards more interactive and personalized learning experiences. Companies that have established a strong brand presence and research capabilities are well-positioned to capitalize on the increasing penetration of AI in education [13][14]. Development Drivers - Key factors driving the growth of AI+Education include a broad user base with a strong willingness to pay, supportive government policies promoting equitable access to educational resources, and technological advancements that reduce costs and improve the functionality of educational tools [29][33]. Application Scenarios - The report categorizes AI applications in education into hardware and software dimensions. In the hardware sector, smart learning devices are gaining traction, particularly in the wake of regulatory changes that limit traditional tutoring methods. In the software sector, AI-powered learning apps are emerging, offering personalized learning paths and automated grading features [46][62]. Company Insights - Duolingo is highlighted for its gamified approach and rapid user growth, with innovative features like AI-driven video calls enhancing user engagement. The company reported a DAU of 40.5 million in Q4 2024, a 51% year-over-year increase [2][69]. - Bean Education is noted for its AI capabilities that enhance user experience and increase customer value through personalized learning solutions. The company is actively exploring partnerships to develop next-generation educational products [2][69]. - Other companies such as Good Future and Youdao are also making significant strides in integrating AI into their educational offerings, with a focus on enhancing existing products and launching new applications [2][69].

Core Viewpoint - The third China AIGC Industry Summit is themed "Everything Can Be AI," highlighting the rapid development of AI products and innovations driven by foundational models [1][2]. Group 1: Event Details - The summit will take place on April 16, 2025, at the Beijing Jinmao Renaissance Hotel, with registration now open for attendees [1][27]. - The event aims to showcase AI applications and facilitate discussions on various AI topics, including AI computing power, AI agents, AI security, and AI in education [2][27]. Group 2: Featured Guests - Notable speakers include Wang Hui, President of Huawei NCE Data Communication, who focuses on AI-driven network solutions [6][7]. - Li Dahai, Co-founder and CEO of Mianbi Intelligent, has a background in leading AI initiatives at Zhihu, contributing to significant user and revenue growth [9][10]. - Jia Shuo, Vice President of Quwan Technology, is recognized for developing the first multimodal music generation model, Tianpu AI, which won a global championship [13][14]. - Xu Dafeng, Head of Intelligent Experience Technology at Ant Group, leads efforts in AI-driven front-end development [17]. - Troy Cui, Director of Data and Storage Products at Amazon Web Services Greater China, has extensive experience in data architecture and AI platform development [21][22]. - Zhang Yi, Head of Intelligent Applications at NetEase Youdao, oversees multiple applications with a total user base exceeding 1 billion [25][26].

Core Insights - AB DAO has announced a strategic partnership with Alpha Technology Group Limited to enhance the application of AI and blockchain technology in supply chain management, enterprise operations, and IoT [1][4] - Alpha Technology Group specializes in AI technology development, particularly in intelligent automation solutions for enterprise resource planning (ERP) systems [2] - AB DAO is recognized for its AI-driven blockchain infrastructure and has developed various prototype products that integrate blockchain and IoT technologies, indicating strong market potential [3] Company Overview - Alpha Technology Group Limited (ATGL) was listed on Nasdaq in 2023 and focuses on AI technology development, enhancing corporate management efficiency through its ERP systems [2] - AB DAO is a leading provider of AI-driven blockchain infrastructure, with a focus on integrating blockchain and IoT technologies through its AB IoT network [3] Partnership Objectives - The partnership between AB DAO and ATGL aims to leverage their complementary strengths to advance the integration of AI and blockchain in logistics, supply chain, and enterprise management [4] - The collaboration seeks to deliver more efficient and secure industry solutions, accelerating innovation and achieving mutual success [4] Ecosystem Expansion - AB DAO is expanding its ecosystem by listing its token $AB on multiple exchanges, including Bitget, HTX, MEXC, and others, to enhance worldwide adoption [4] - The company has set a goal to reach 100 million $AB holders, indicating a strong focus on community engagement and growth [5]

Financial Data and Key Metrics Changes - In Q4 2024, net revenues reached RMB1.3 billion, a 9.5% decline year-over-year, primarily due to decreased revenues from learning services [7][33] - Operating income for Q4 was RMB84.2 million, an increase of 10.3% year-over-year, while operating cash inflow remained stable at RMB158.2 million [8][9] - For the full year 2024, total revenues increased by 4.4% to RMB5.6 billion, with net income attributable to ordinary shareholders at RMB82.2 million, a significant turnaround from a loss of RMB466.3 million in 2023 [9][38][39] Business Line Data and Key Metrics Changes - Learning services generated net revenues of RMB617.7 million in Q4, down 21.2% year-over-year, while digital content services within this segment reached RMB388.8 million, covering costs and generating profits [10][11] - Smart devices segment saw net revenues of RMB240.4 million in Q4, an 8.1% increase year-over-year, driven by strong sales of the Youdao Dictionary Pen [23][25] - Online marketing services reported net revenues of RMB481.7 million in Q4, a modest increase of 1.6% year-over-year, with a gross margin of 34.2% [19][35] Market Data and Key Metrics Changes - The company noted strong growth in AI-driven subscription services, with total sales increasing over 130% year-over-year to over RMB200 million for 2024 [13][14] - The international advertising segment achieved over 100% year-over-year growth, aided by partnerships with platforms like TikTok and Google [20][69] Company Strategy and Development Direction - The company is focusing on AI-driven education technology and online marketing technologies, aiming to enhance offerings through cutting-edge AI and establish leadership in key product segments [44][45] - Plans for 2025 include maintaining market leadership in smart devices while introducing new products, such as the Youdao SpaceOne pen, and expanding AI features in learning services [52][53] - The strategy also emphasizes deepening collaboration with NetEase to enhance advertising efficiency and exploring global expansion opportunities [55][69] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term prospects of online marketing services, particularly through performance-based advertising and AI applications [22][55] - The company anticipates moderate revenue growth in 2025 while maintaining a focus on profitability, especially in a challenging economic environment [31][62] Other Important Information - The company achieved full-year operating profitability for the first time in 2024, with a significant improvement in cash flow, narrowing net cash outflow to RMB67.9 million [30][61] - The launch of the Confucius-o1 reasoning model is expected to enhance educational offerings and operational efficiency [14][91] Q&A Session Summary Question: Outlook for 2025 across different business lines - Management highlighted a focus on AI-driven education and marketing technologies, with plans to enhance offerings and maintain profitability [44][48] Question: Opportunities in online marketing business and global expansion - The strategy includes intensifying collaboration with NetEase and expanding into international markets, leveraging partnerships with TikTok and Google [68][69] Question: Priorities for Learning Services in 2025 - The focus will be on high-demand products like Youdao Lingshi, with ongoing restructuring expected to stabilize revenues [75][76] Question: Impact of integrating Confucius with DeepSeek on business operations - The integration is expected to enhance educational applications and advertising efficiency through advanced AI capabilities [84][90]

I nve s t o r R e l at i o ns , F e b r uar y 23, 2023 This presentation contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ material ...

Financial Performance Overview - Total net revenues for Q4 2024 were RMB1.3 billion (US$183.6 million), a 9.5% decrease from RMB1.5 billion in Q4 2023 [2][5] - For the fiscal year 2024, total net revenues reached RMB5.6 billion (US$770.7 million), representing a 4.4% increase from RMB5.4 billion in 2023 [21] Revenue Breakdown - Net revenues from learning services in Q4 2024 were RMB617.7 million (US$84.6 million), a 21.2% decrease from RMB784.0 million in Q4 2023 [2][6] - Net revenues from smart devices increased to RMB240.4 million (US$32.9 million) in Q4 2024, an 8.1% increase from RMB222.4 million in Q4 2023 [7] - Net revenues from online marketing services were RMB481.7 million (US$66.0 million) in Q4 2024, showing a modest increase from RMB474.1 million in Q4 2023 [7] Profitability Metrics - Gross profit for Q4 2024 was RMB640.8 million (US$87.8 million), a 13.3% decrease from RMB738.8 million in Q4 2023, with a gross margin of 47.8% compared to 49.9% in the same period last year [8][9] - Income from operations for Q4 2024 was RMB84.2 million (US$11.5 million), a 10.3% increase from RMB76.3 million in Q4 2023, with an operating margin of 6.3% [15] - Net income attributable to ordinary shareholders for Q4 2024 was RMB83.0 million (US$11.4 million), a 47.0% increase from RMB56.5 million in Q4 2023 [16] Strategic Initiatives - The company achieved its first-ever full-year profitability in 2024, with a retention rate exceeding 70% for Youdao Lingshi in Q4 [3] - An 'AI Native' strategy is being launched to integrate AI across business lines, including automating advertising platforms and introducing AI-driven tutoring [4] Operating Expenses - Total operating expenses for Q4 2024 were RMB556.6 million (US$76.3 million), down from RMB662.5 million in Q4 2023 [11] - Sales and marketing expenses decreased by 13.5% to RMB381.8 million (US$52.3 million) in Q4 2024 [12] - Research and development expenses were RMB120.7 million (US$16.5 million), a decrease of 28.2% from RMB168.1 million in Q4 2023 [13] Cash and Financial Position - As of December 31, 2024, the company's cash and cash equivalents totaled RMB662.6 million (US$90.8 million), up from RMB527.1 million a year earlier [19] - The company has received financial support from NetEase Group, including RMB878.0 million in short-term loans and US$126.1 million in long-term loans [19]

Core Points - Youdao, Inc. will report its fourth quarter and fiscal year 2024 financial results on February 20, 2025, before the U.S. markets open [1] - The earnings teleconference call will occur at 5:00 a.m. Eastern Time on the same day, with management available to discuss results and answer questions [2] - Youdao is an intelligent learning company in China, offering a range of educational technologies and solutions, including online tools, smart devices, and interactive learning apps [4] Financial Reporting - The financial results announcement is scheduled for February 20, 2025, before market opening [1] - A live webcast of the earnings call will be available on the company's investor relations website [2] - A replay of the conference call will be accessible by phone for a week after the live call [3] Company Overview - Youdao, Inc. is dedicated to developing technologies for learning content and solutions for users of all ages [4] - The company offers products such as Youdao Dictionary, Youdao Translation, STEAM courses, and vocational training [4] - Youdao was founded in 2006 as part of NetEase, Inc., a leading internet technology company in China [4]

Company Overview - Youdao is a leading intelligent learning company in China, showcasing its AI-equipped smart device, the Youdao Dictionary Pen X7 series, at CES 2025 [1] - The company focuses on using technology to provide educational content, applications, and solutions for learners of all ages [16] Product Highlights - The Youdao Dictionary Pen X7 series features proprietary applications, including Hi Echo and Mr P AI Tutor, based on the 'Zi Yue' educational large language model [2] - The X7 series provides offline translation capabilities through an edge-side large language model, enhancing the accuracy and fluency of language learning [12] - The dictionary pen also offers AI intelligent learning features such as AI essay refinement [13] - The Youdao Dictionary Pen X7 quickly became the best-selling product in the thousand-yuan price range, surpassing 30,000 units sold [14] Technological Innovation - Youdao launched China's first educational large language model, 'Zi Yue', in 2023, which has been integrated into all of its software and hardware products [4] - The company has developed the industry's first edge large language model, applied to the X7 series of dictionary pens, achieving translation results comparable to online NMT [11][12] - Youdao is exploring the application of smaller models on the edge for specific scenarios, enhancing precision and user experience [8][10] Market Performance - Youdao's AI subscription service has achieved rapid growth for seven consecutive quarters [7] - During the 2024 Nov 11th Shopping Festival in China, the Youdao Dictionary Pen X7 Pro topped several industry rankings on major e-commerce platforms, marking the fifth consecutive year of leading sales in its category [14] Strategic Focus - Youdao is actively promoting the application of the 'Zi Yue' educational large language model in various scenarios, conducting a comprehensive AI upgrade of its business products [7] - The company will continue to increase investment in the research and development of edge model applications, focusing on AI + education to provide learners with a better learning experience [15] Industry Collaboration - Youdao participated in the Microsoft Greater China offline event at CES 2025, engaging in discussions on AI innovation and the globalization of consumer electronics in China [3]

Investment Rating - The report maintains a "Buy" rating for DAO (Youdao) with a target price of $6.69 per ADS [6][17] Core Views - DAO achieved its first-ever Q3 profitability in 2024, with revenue reaching a historical high of RMB 1.573 billion, a 2.19% YoY increase [1] - The company's AI-driven education products showed strong performance, with AI subscription services sales growing over 150% YoY to nearly RMB 70 million [2] - DAO's smart hardware business revenue increased by 25.18% YoY, driven by the launch of the AI-powered Youdao Dictionary Pen X7 series [2] - Online marketing services revenue grew 45.59% YoY, benefiting from AI-optimized RTA advertising and overseas game promotion [2] Financial Performance - For 2024 Q1-Q3, DAO reported revenue of RMB 4.286 billion, a 9.66% YoY increase, with a significant reduction in net loss to RMB 0.79 million [1] - Non-GAAP net income turned positive at RMB 13 million for the first nine months of 2024 [1] - The company improved cost efficiency, with sales expense ratio decreasing by 10.77 percentage points YoY to 33.04% in Q3 2024 [2] Business Segment Analysis Learning Services - Revenue decreased by 19.24% YoY to RMB 768 million in Q3 2024 due to reduced low-ROI customized services [2] - Digital content services generated RMB 514 million in net revenue, while AI subscription services contributed nearly RMB 70 million [2] Smart Hardware - Revenue grew 25.18% YoY to RMB 315 million in Q3 2024 [2] - The Youdao Dictionary Pen X7 series became the first learning hardware to achieve offline AI large model translation [2] Online Marketing Services - Revenue increased 45.59% YoY to RMB 489 million in Q3 2024 [2] - RTA advertising grew over 100% YoY, and KOL advertising increased more than 50% due to overseas game promotion [2] Financial Projections - Revenue is expected to grow from RMB 5.75 billion in 2024 to RMB 7.198 billion in 2026 [4][15] - Non-GAAP net income is projected to increase from RMB 41 million in 2024 to RMB 291 million in 2026 [15] - The PS ratio is forecasted to decrease from 0.75x in 2024 to 0.60x in 2026 [4] Valuation and Comparison - DAO's 2024E PS ratio of 0.75x is lower than peers like New Oriental (2.12x) and Gaotu (1.07x) [18] - The company's market capitalization stands at RMB 4.332 billion as of November 18, 2024 [18]

Investment Rating - The report maintains a "Buy" rating for the company with a target price raised from $4.50 to $7.30, indicating a potential upside of 47.5% from the current price of $4.95 [2][5][12]. Core Insights - The company achieved its first profitable quarter in Q3, with an adjusted net profit of 89 million RMB, exceeding market expectations of 35 million RMB. Revenue grew by 2% year-on-year, despite a 19% decline in learning services revenue due to reduced customer acquisition spending under strict ROI standards. AI-driven subscription services saw a significant increase, with sales reaching 70 million RMB, a 150% year-on-year growth [3][4]. - Hardware revenue increased by 25% year-on-year, driven by the launch of new products, particularly the X7 series of dictionary pens, which helped restore hardware revenue and gross margin, achieving a gross margin of 42.8%, up 13 percentage points quarter-on-quarter [3][4]. - The company continues to focus on its AI and education strategy, with a high school renewal rate reaching 70%, up 5 percentage points year-on-year, laying a solid foundation for long-term business growth [3][4]. Financial Forecast Changes - Revenue forecasts for 2024 and 2025 have been adjusted downwards by 6.2% and 7.2% respectively, reflecting a strategic shift towards profitability. The 2025 revenue is now projected at 6,419 million RMB, while the adjusted net profit for 2024 is expected to be 63 million RMB, increasing to 122 million RMB in 2025 [4][16]. - The gross profit margin is projected to be 49.3% in 2024, slightly improving to 50.1% in 2025, while the adjusted operating profit margin is expected to rise to 4.1% in 2025 [4][16].