IFLYTEK(SZ:002230) Minsheng Securities·2024-10-22 05:08Investment Rating - The report maintains a "Recommended" rating for the company [3][4]. Core Views - The third quarter of 2024 showed significant improvement with revenue growth, gross profit, net profit, and cash flow turning positive, indicating a potential turning point for AI commercialization [2][3]. - The company achieved a revenue of 55.25 billion yuan in Q3 2024, representing a year-over-year increase of 15.77%, and a gross profit of 22.60 billion yuan, up 16.68% year-over-year [2]. - The net profit for Q3 2024 turned positive at 0.57 billion yuan, a significant improvement from the losses of 3.00 billion yuan and 1.00 billion yuan in Q1 and Q2 respectively [2]. Summary by Relevant Sections Financial Performance - For the first three quarters of 2024, the company reported a total revenue of 148.5 billion yuan, a year-over-year increase of 17.73%, while the net profit attributable to shareholders was a loss of 3.44 billion yuan [2]. - The operating cash flow for Q3 2024 was 7.15 billion yuan, showing a remarkable year-over-year growth of 100.09% [2]. AI Commercialization Milestones - The "Xunfei Xinghuo" model has solidified its competitive advantages and is now the preferred choice for state-owned enterprises, leading in project bids and amounts in the industry [3]. - The number of developers using the "Xunfei Xinghuo" model has rapidly increased, with 177.7 million new developers added, and over 1.9 billion downloads of the "Xunfei Xinghuo" app on Android [3]. Future Earnings Projections - The report forecasts earnings per share (EPS) for 2024, 2025, and 2026 to be 0.18 yuan, 0.31 yuan, and 0.44 yuan respectively, with corresponding price-to-earnings (PE) ratios of 262X, 150X, and 105X based on the market capitalization as of October 21, 2024 [3][4].