Investment Rating - The report maintains a "Buy" rating for the company with a target price of $11.41 [5][6]. Core Insights - The company's Q1 2025 performance showed revenue of 1.3 billion RMB, a year-over-year decrease of 6.7%, while operating profit reached 100 million RMB, a significant increase of 247.7%, marking a historical high for Q1 [1]. - The "AI-native" strategy is driving continuous improvement in profitability, focusing on high-demand scenarios and accelerating the commercialization of AI capabilities in education and marketing [1]. - The company is expected to achieve an operating profit of 216 million RMB for the full year 2025, representing a year-over-year increase of 45% due to accelerated AI commercialization and ongoing cost reduction measures [3]. Revenue Breakdown - In Q1 2025, the company's learning services, smart hardware, and online marketing businesses generated revenues of 602 million RMB, 190 million RMB, and 505 million RMB, respectively, with learning services experiencing a year-over-year decline of 16.1% [2]. - The AI enrollment planner has been upgraded, leading to an increase in renewal rates, while AI subscription services saw sales of nearly 70 million RMB, with a growth rate exceeding 40% [2]. Profitability and Cost Management - The operating profit margin for Q1 2025 was 8%, with significant reductions in sales, R&D, and management expenses, which decreased by 21%, 21%, and 25% year-over-year, respectively [3]. - The report anticipates that the company's profitability will continue to improve as it implements further cost optimization strategies [3]. Financial Forecast and Valuation - The report maintains the Non-GAAP net profit forecasts for 2025-2027 at 173 million RMB, 243 million RMB, and 343 million RMB, respectively [4]. - Using the SOTP valuation method, the company is assigned a PE of 23.22x for K12 business and 26.69x for smart hardware, with a target price adjustment to $11.41 based on comparable company valuation changes [4][10].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of $11.41 [5][6][10] Core Insights - The company's Q1 revenue was 1.3 billion RMB, a year-over-year decrease of 6.7%, while operating profit reached 100 million RMB, a significant increase of 247.7%, marking a historical high for Q1 [1][3] - The "AI-native" strategy is driving continuous improvement in profitability by focusing on high-demand scenarios and accelerating the commercialization of AI capabilities in education and marketing [1][2] - The company is expected to achieve an annual operating profit of 216 million RMB in 2025, a year-over-year increase of 45%, supported by accelerated AI commercialization and ongoing cost reduction measures [3] Revenue Breakdown - In Q1, the company's learning services, smart hardware, and online marketing businesses generated revenues of 602 million RMB, 190 million RMB, and 505 million RMB, respectively, with learning services experiencing a year-over-year decline of 16.1% [2] - The AI enrollment planner has been upgraded, leading to an increase in renewal rates, while AI subscription services saw sales of nearly 70 million RMB, with a growth rate exceeding 40% [2] Profitability and Cost Management - The operating profit margin for Q1 was 8%, with significant reductions in sales, R&D, and management expenses, which decreased by 21%, 21%, and 25% year-over-year, respectively [3] - The report anticipates that the company's profitability will continue to improve as it implements further cost optimization strategies [3] Financial Forecast and Valuation - The report maintains the Non-GAAP net profit forecasts for 2025-2027 at 173 million RMB, 243 million RMB, and 343 million RMB, respectively [4] - Using the SOTP valuation method, the company is assigned a PE of 23.22x for K12 business and 26.69x for smart hardware, with a target price adjustment based on comparable company valuation changes [4][10]

3. 信达生物(01801)涨近3% ，宣布玛仕度肽在相关肥胖的III期临床研究(GLORY-3)完成首例受试者给 药。 一脉阳光(02522)盘中涨超5% 拟斥至多1亿港元回购股份 公司深入挖掘医学影像数据价值。 康希 诺生物(06185)涨超3% 吸入用结核病加强疫苗临床试验获印度尼西亚药监局批准。 4. H&H国际控股(01112)再涨超8% 市场炒作麦角硫因概念 公司旗下Swisse品牌有超光瓶产品。 ANC方 面，Swisse在抖音、跨境等高景气细分优势明显，24年增长快于行业；PNC板块需求旺盛，公司聚焦 高毛利产品并退出亏损渠道，以提升盈利水平，Q1 SolidGold已基本实现盈利。 5. 正大企业国际(03839)早盘涨超32% 一季度股东应占溢利同比增超6.7倍。 6. 浙江世宝(01057)涨近7% 近期获股东连续增持 公司出口业务主要面向新兴市场。 点击蓝字，关注我们 今日上午港股 1. 网易-S(09999)绩后高开超10% ，涨10.89%，报186.4港元，成交额3.16亿港元。消息面上，网易 公布2025年第一季度业绩，净收入为人民币288.285亿元，同比增加 7.4%；毛利 ...

【4】网易有道2025年一季度经营利润1.04亿元 5月15日，网易有道公布了2025年第一季度未经审计的财务报告，报告期内，网易有道实现净收入13亿 元；经营利润1.04亿元，同比增长247.7%，创一季度历史新高。 5月15日，据北京日报报道，北京高校将开展课程思政教学研究示范中心建设。市委教育工委、市教委 近日发布通知，明确将选树一批示范中心，全面推进课程思政建设理论研究和教学实践，引导高校主动 服务国家重大战略和北京"四个中心"城市功能定位。市教委介绍，示范中心应形成具有推广价值的经验 做法和高质量的研究成果，能够有效指导和有力推进学校、院系、教师不同层面的课程思政建设，并在 校内外形成示范辐射效应。 【2】京津冀心理教育共同体成立 近日，京津冀心理教育共同体启动会在北京市第二中学通州校区（教育集团）举办。来自京津冀地区的 38所学校成为首批共同体成员校。首批成员校包括北京市第二中学通州校区、首都经济贸易大学附属中 学等10所中小学校，天津市武清区、蓟州区等地的4所中小学校，河北省三河市、遵化市、大厂回族自 治县、香河县等地的24所学校。 【3】高途2025年一季度净利润超1.2亿元 5月15日，高途 ...

Core Viewpoint - The integration of AI in education is becoming increasingly diverse, driving revenue growth for education companies, as evidenced by NetEase Youdao's Q1 2025 financial results [2][3]. Financial Performance - NetEase Youdao reported Q1 2025 net revenue of 1.3 billion yuan, a decrease of 6.7% compared to the same period in 2024 [2]. - The net profit attributable to ordinary shareholders for Q1 was 76.7 million yuan, a significant increase of 518.5% year-over-year [2]. - Total operating expenses for Q1 were 510 million yuan, down 21.7% year-over-year [2]. Business Segments - Learning services net revenue for Q1 was 602 million yuan, a decline of 16.1% year-over-year, but the rate of decline narrowed by approximately 5 percentage points compared to the previous quarter [2]. - The company plans to focus on high-potential services like Youdao Ling Shi while reducing non-core business activities [2]. - Smart device revenue for Q1 was 190 million yuan, an increase of 5.1% year-over-year, driven by strong sales of the Youdao dictionary pen [2]. - Online marketing services net revenue for Q1 was 510 million yuan, a growth of 2.6% year-over-year, with expectations for stronger growth in the second half of the year [3]. Strategic Initiatives - Youdao is accelerating overseas advertising expansion, with ongoing collaboration with Google expected to contribute significantly to revenue in the second half of the year [3]. - The integration of DeepSeek into self-developed large models and Youdao Xiao P has achieved 99.9% availability, lower latency, and higher cost efficiency [3]. - The company is also expediting the deployment of self-hosted DeepSeek R1 inference services to enhance stability and cost control [3]. Industry Trends - More online education companies are integrating products with DeepSeek, with notable players like Xueersi, Yuanfudao, and Zuoyebang announcing similar initiatives [4]. - The AI contribution rate in the online education market is projected to increase from 7% in 2023 to 16% by 2027 [4].

一季度的总营业费用为人民币5.1亿元（约合7030万美元），相比去年同期的人民币6.52亿元有所减少。 第一季度的销售和营销费用为人民币3.58亿元（约合4930万美元），比2024年同期的人民币4.55亿元减 少21.5%。这一减少是由于减少了营销支出，以及2025年第一季度的学习服务和智能设备相关的工资费 用下降所致。此外，一季度的研发费用为人民币1.16亿元（约合1590万美元），同比减少了21.3%。该 减少主要是由于研发员工人数减少，导致2025年第一季度的工资支出节省。 上述三大业务板块收入表现都不甚出色。而营业费用则下降超过1.4亿元，公司通过节流的方式拓展利 润空间。 有道的现金、现金等价物、流动和非流动限制性现金以及短期投资总计为人民币4.25亿元（约5850万美 元），截至2024年12月31日为人民币6.63亿元。 有道今日公布一季报，今年一季度实现营业收入13亿元，同比减少6.7%，实现经营利润1.04亿元，创一 季度历史新高，同比增长247.7%。 有道一季度学习服务营业收入为人民币6.02亿元（8300万美元），同比下降了16.1%。同比下降主要是 因为继续采取严格的战略客户获取方 ...

I n v e s t o r R e l a t i o n s , F e b r u a r y 2 3 , 2 0 2 3 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 diff ...

Financial Data and Key Metrics Changes - Operating income reached a Q1 record of RMB104.0 million, surging 247.7% year over year [7] - Net revenues were RMB1.3 billion, declining 6.7% primarily due to decreased learning services revenue [7][19] - Operating cash outflow narrowed by 34.7% to RMB255.5 million, reflecting stronger financial efficiency [8] - Net income attributable to ordinary shareholders was RMB76.7 million, an increase of over six times from RMB12.4 million for the same period last year [22] - Non-GAAP net income attributable to ordinary shareholders for the first quarter was RMB31.7 million, significantly increased from RMB20.3 million for the same period last year [23] Business Line Data and Key Metrics Changes - Net revenues from learning services segment declined by 16.1% year over year, but the rate of decline narrowed by approximately five percentage points compared to the previous quarter [9][20] - Net revenues from digital content services within the learning services segment were RMB410.8 million in Q1 [9] - Net revenue from smart devices was RMB190.5 million, representing a 5.1% year over year growth [20][16] - Net revenue from online marketing services rose 2.6% year over year to RMB505.4 million [20][13] Market Data and Key Metrics Changes - The performance-based advertising client base grew by 20% year over year in Q1 [13] - Gross margin from online marketing services moderated to 30.5%, an approximately four percentage point decline year over year [15] - Gross margin for learning services was 59.8%, compared with 63.1% for the same period of 2024 [21] Company Strategy and Development Direction - The company is executing an AI native strategy, applying large language models to critical learning and advertisement scenarios [8] - The launch of Confucius one, an open-source reasoning model, and Youdao Magic Box, an AI-powered app creator suite, are key strategic initiatives [8][9] - The company aims to maintain a positive trajectory, targeting accelerated profit growth and achieving operating cash flow breakeven for the full year 2025 [17] Management Comments on Operating Environment and Future Outlook - Management emphasized the importance of embracing open technologies and integrating proprietary models to enhance user experiences [28] - The company anticipates completing its segment restructuring in the second half of the year, with revenue stabilization expected thereafter [41] - Management expects online marketing services revenue to show stronger growth momentum in the second half of the year, driven by overseas advertising expansion and automated AI-powered advertising solutions [44] Other Important Information - The upgraded Mr. P AI Tutor achieved over 92% accuracy in K-12 problem solving, significantly surpassing standalone models [12][32] - The company has secured official Google Partner certification, complementing its existing TikTok partnership, which enhances its advertising capabilities [13] Q&A Session Summary Question: How does management view the integration of large language models in educational scenarios? - Management highlighted the advantages of combining open and proprietary technologies, enhancing user experiences and accelerating technology growth [28][30] Question: When does management project the learning services segment's revenue to return to growth? - Management indicated that the restructuring of the learning services segment is ongoing, with expectations for revenue stabilization in the second half of the year [41] Question: When does management anticipate a reacceleration in online marketing services revenue growth? - Management expects stronger growth momentum in the second half of the year, driven by overseas advertising expansion and new automated solutions [44]

Financial Data and Key Metrics Changes - Operating income reached a Q1 record of RMB104.0 million, surging 247.7% year over year [6] - Net revenues were RMB1.3 billion, declining 6.7% year over year, primarily due to decreased learning services revenue [6][19] - Operating cash outflow narrowed by 34.7% to RMB255.5 million, reflecting stronger financial efficiency [7] - Net income attributable to ordinary shareholders was RMB76.7 million, an increase of over six times from RMB12.4 million for the same period last year [22] - Non-GAAP net income attributable to ordinary shareholders for the first quarter was RMB31.7 million, significantly increased from RMB20.3 million for the same period last year [23] Business Line Data and Key Metrics Changes - Learning services segment net revenues were RMB602.4 million, representing a 16.1% decrease year over year [20] - Smart devices segment revenues were RMB190.5 million, up 5.1% year over year [20] - Online marketing services net revenues rose 2.6% year over year to RMB505.4 million [20] - Gross margin for learning services was 59.8%, down from 63.1% year over year [21] - Gross margin for smart devices improved to 52.3% from 32.6% year over year [21] - Gross margin for online marketing services moderated to 30.5%, a decline of approximately four percentage points year over year [15] Market Data and Key Metrics Changes - The performance of the Youdao Lingxus service showed resilience, with gross billings growing over 25% year over year [41] - The AI-driven subscription services generated nearly RMB70 million in Q1 sales, growing over 40% year over year [10] - The overseas advertising client base grew by 20% year over year in Q1 [13] Company Strategy and Development Direction - The company is executing an AI native strategy, applying large language models to critical learning and advertisement scenarios [8] - Focus on enhancing user experiences through proprietary and open technologies, with a dual approach to model deployment [29] - Plans to deepen focus on educational verticals and expand the capabilities of the Confucius model [34] - Targeting accelerated profit growth and achieving operating cash flow breakeven for the full year 2025 [16] Management Comments on Operating Environment and Future Outlook - Management anticipates the learning services segment's revenue to stabilize and return to growth in the second half of the year [42] - Online marketing services revenue is expected to show stronger growth momentum in the second half of the year, driven by overseas advertising expansion and automated AI-powered advertising solutions [46] - The company acknowledges potential macroeconomic uncertainties that may affect results but remains optimistic about reducing operating losses in Q2 year over year [53] Other Important Information - The company launched several innovative products, including the Youdao Magic Box and the AI Podcaster system, enhancing its product offerings [12][14] - The company achieved a significant milestone by being ranked as the world's number two ad tech company by Time Magazine [34] Q&A Session Summary Question: How does management view the integration of large language models in educational scenarios? - Management emphasized the importance of embracing open technologies and highlighted the advantages of combining open and proprietary technologies for enhanced user experiences and faster responses [28][30] Question: When does management project the learning services segment's revenue to return to growth? - Management indicated that the restructuring of the learning services segment is ongoing and expects revenue stabilization in the second half of the year, driven by the growth of AI college admission advisers [42] Question: When does management anticipate a reacceleration in online marketing services revenue growth? - Management expects stronger growth momentum in the second half of the year, driven by overseas advertising expansion and the launch of AI-powered advertising solutions [46] Question: Is there a possibility of profitability in the second quarter this year? - Management acknowledged that Q2 is traditionally the weakest quarter but expects to significantly reduce operating losses year over year while focusing on strategic priorities [53]

Core Viewpoint - NetEase Youdao reported strong financial performance for Q1 2025, highlighting significant growth in revenue and operating profit driven by AI technology applications in learning services [1] Financial Performance - In Q1 2025, Youdao achieved a net revenue of 1.3 billion yuan, with an operating profit of 104 million yuan, marking a historical high for Q1 and a year-on-year increase of 247.7% [1] - Operating cash flow showed improvement, with a year-on-year reduction in net outflow by 34.7%, indicating enhanced financial efficiency [1] AI Technology Application - Youdao continued to deepen the application of AI technology in the learning services sector, utilizing the "Ziyue" large model to drive product intelligence upgrades [1] - The net revenue from learning services in Q1 reached 602 million yuan, reflecting the company's focus on AI integration [1] Subscription Services Growth - Youdao's AI subscription services experienced robust growth, achieving sales of nearly 70 million yuan in Q1, with a year-on-year increase of over 40% [1]