Wondershare(300624) 财信证券·2024-08-23 10:11Investment Rating - The report maintains a "Buy" rating for Wanxing Technology (300624 SZ) [1] Core Views - Wanxing Technology's H1 2024 performance was under pressure due to increased AI investments, leading to a decline in gross margin and higher R&D expenses [3] - The company continues to enhance its AI capabilities, with over 100 AI algorithms developed or integrated, resulting in over 100 million calls [4] - Wanxing Technology is actively exploring AI commercialization scenarios and monetization models, which could expand its product revenue potential [5] - The company announced a share repurchase plan to boost employee confidence, with a maximum repurchase price of 71 78 yuan per share [5] - Revenue and profit forecasts for 2024-2026 have been slightly adjusted downward, with expected revenue growth rates of 10 05%, 20 68%, and 20 98% respectively [5] Financial Performance - H1 2024 revenue was 705 million yuan, a YoY decrease of 1 80%, with net profit attributable to the parent company at 24 million yuan, a YoY decrease of 43 99% [3] - Q2 2024 revenue was 347 million yuan, a YoY decrease of 4 43%, with a net loss of 1 million yuan [3] - Gross margin decreased by 1 62 percentage points due to increased server and AI software costs [3] - R&D expense ratio increased by 2 83 percentage points YoY [3] AI Development - Wanxing Technology is advancing its self-developed multimedia model, integrating it with various products and accessing high-quality algorithms [4] - The company has developed or integrated over 100 AI algorithms, achieving over 100 million calls [4] - AI features such as AI background removal, noise reduction, and text generation are being monetized through AI add-on packages [5] Share Repurchase - The company plans to repurchase 2000-4000 million yuan worth of shares at a maximum price of 71 78 yuan per share, representing 0 14%-0 29% of total shares [5] - The repurchased shares will be used for employee stock ownership or equity incentive plans [5] Financial Forecasts - 2024-2026 revenue is forecasted at 16 30, 19 67, and 23 79 billion yuan, with YoY growth rates of 10 05%, 20 68%, and 20 98% respectively [5] - Net profit attributable to the parent company is expected to be 93, 119, and 160 million yuan, with YoY growth rates of 8 13%, 28 18%, and 33 66% respectively [5] - EPS is projected at 0 48, 0 62, and 0 83 yuan, with corresponding P/E ratios of 87, 68, and 51 times [5] Valuation Metrics - Current P/E ratio is 87 15, with a P/B ratio of 5 78 [5] - The company's P/S ratio is expected to decrease from 5 0 in 2024 to 3 4 in 2026 [5]