ROYALFLUSH INFO(SZ:300033) Southwest Securities·2024-09-03 06:16Investment Rating - The report maintains a "Buy" rating for the company with a target price of 126.36 CNY over the next six months [1][3]. Core Insights - The company reported a revenue of 1.39 billion CNY for H1 2024, a year-on-year decline of 5.5%, and a net profit attributable to shareholders of 360 million CNY, down 21.0% year-on-year [2]. - The company continues to increase its investment in AI research and development, enhancing its product competitiveness [2]. - The growth in contract liabilities indicates a stable cash flow, with cash inflow from sales reaching 1.57 billion CNY, a decrease of 7.0% year-on-year [2]. Summary by Sections Financial Performance - H1 2024 revenue was 1.39 billion CNY, down 5.5% year-on-year; net profit was 360 million CNY, down 21.0% year-on-year; Q2 revenue was 770 million CNY, down 10.5% year-on-year [2]. - The company’s gross margin for H1 2024 was 84.9%, a decline of 1.15 percentage points year-on-year [2]. Business Segments - Value-added telecommunications services generated 770 million CNY in revenue, down 11.0% year-on-year; advertising and internet services revenue increased by 9.5% to 350 million CNY [2]. - Software sales and maintenance revenue was 100 million CNY, down 7.2% year-on-year; fund sales and other services generated 170 million CNY, down 4.9% year-on-year [2]. R&D and AI Investment - The company is enhancing its AI capabilities across various business functions, including financial information, investment research, and customer service, which is expected to improve service efficiency [2]. Future Earnings Forecast - The company is projected to achieve revenues of 3.53 billion CNY in 2024, a decrease of 0.9%, followed by 3.89 billion CNY in 2025, an increase of 10.3%, and 4.32 billion CNY in 2026, an increase of 11.0% [11]. - Net profit forecasts for 2024, 2025, and 2026 are 1.30 billion CNY, 1.47 billion CNY, and 1.67 billion CNY, respectively [11]. Valuation Metrics - The report suggests a PE ratio of 52 for 2024, with corresponding EPS estimates of 2.43 CNY, 2.74 CNY, and 3.11 CNY for 2024, 2025, and 2026, respectively [3][12].