Kunlun(SZ:300418) Shanxi Securities·2024-08-28 13:32Investment Rating - The report maintains a "Buy-A" rating for the company, indicating an expected price increase of over 15% relative to the benchmark index [2]. Core Views - The company's Q2 revenue showed steady growth, with a year-on-year increase of 7.1%, driven by strong performance in its overseas Opera business. However, the net profit was under pressure due to increased AI R&D investments and fluctuations in investment income [2][3]. - The company is positioned as a leading player in the domestic AI industry, which is expected to provide a strong competitive advantage as it continues to implement its "All in AI" strategy [3]. Financial Performance Summary - For the first half of 2024, the company achieved revenue of 2.502 billion yuan, a year-on-year increase of 3.16%, while the net profit attributable to the parent company was -389 million yuan, a decline of 208.64% [1]. - In Q2 2024, the company reported revenue of 1.294 billion yuan, up 7.1% year-on-year, but the net profit was -202 million yuan, down 238% year-on-year, primarily due to increased AI R&D spending [1][2]. - The company’s R&D expense ratio for the first half of 2024 was 30.27%, an increase of 15.80 percentage points year-on-year, reflecting its commitment to AI development [2]. Revenue and Profit Forecast - The revenue forecast for 2024E is 5.441 billion yuan, with a year-on-year growth of 10.7%. The net profit forecast for 2024E is 151 million yuan, representing a significant decline of 88% [4][6]. - The projected net profit growth for 2025E and 2026E is 199.4% and 48.3%, respectively, indicating a recovery trend after the anticipated decline in 2024 [3][4]. Key Financial Metrics - As of June 30, 2024, the basic earnings per share (EPS) was -0.32 yuan, and the diluted EPS was also -0.32 yuan [2]. - The net asset return rate (ROE) was -2.81% [2]. - The company’s total market capitalization is 31.933 billion yuan, with a circulating A-share market value of 31.933 billion yuan [2].