CLOUDWALK(688327) 申万宏源·2024-06-25 01:31Investment Rating and Valuation - The report gives a "Buy" rating for the company with a target market cap of 14.81 billion yuan (12x 2025 PS) [4] - The company's revenue is expected to grow by 52% in 2025, driven by the recovery of smart governance and the commercialization of industry-specific large models [4] - Revenue forecasts for 2024-2026 are 803 million yuan, 1.221 billion yuan, and 1.609 billion yuan, respectively, with net losses narrowing to -459 million yuan, -352 million yuan, and -275 million yuan [4][9] Core Business and Market Position - The company focuses on AI solutions for smart governance, finance, transportation, and commercial sectors, with smart governance being its core business [1][5] - It has a strong presence in the financial sector, covering over 100 financial institutions, including six major state-owned banks [5][16] - The company has a significant market share in airports and banks, with AI market penetration exceeding 70% in these sectors [40] Technology and Innovation - The company has developed a multi-modal large model architecture called "All in One," which aligns visual and language encodings at the input layer, reducing information loss and improving target perception [5][71] - It has set four world records in AI technologies, including face recognition, cross-camera tracking, speech recognition, and natural language processing [56] - The company's large model, "Congrong," has demonstrated capabilities close to ChatGPT in certain tasks, ranking 7th in the SuperCLUE benchmark as of April 2024 [63][70] Financial Performance and Projections - The company's revenue in 2023 was 628 million yuan, a 19.33% year-on-year increase, with a net loss of 643 million yuan, narrowing by 225 million yuan [41] - Smart governance accounted for 54.31% of revenue in 2023, while smart transportation and smart commercial sectors showed significant growth [44][86] - The company's gross margin is expected to improve from 52.2% in 2023 to 56.3% in 2026, driven by the increasing contribution of its CWOS platform [132] Strategic Partnerships and Ecosystem - The company has partnered with Huawei's Ascend ecosystem to develop AI hardware products, including training and inference integrated machines [92][102] - It has collaborated with major clients like Jiangsu Jinshiyuan Liquor to develop industry-specific large models for intelligent manufacturing [81] - The company's CWOS platform is integrated with Huawei's Ascend chips, enabling private deployment for enterprises [102] Industry Trends and Competitive Landscape - The company is differentiated from competitors like SenseTime by its focus on industry-specific large models and vertical integration [34] - It has a strong foothold in the financial, transportation, and commercial sectors, with over 100 financial institutions and 90% of China's top 10 airports as clients [5][115] - The company's large model strategy is expected to drive growth in emerging sectors like smart energy, education, and tourism [108][155] Risks and Challenges - The company faces risks from macroeconomic factors, particularly in its smart governance business, which is heavily reliant on government projects [120] - Competition in the AI industry is intense, with rapid technological advancements requiring continuous R&D investment [142] - The company's reliance on government contracts and long payment cycles could impact cash flow if macroeconomic conditions worsen [164]