IFLYTEK(SZ:002230) Goldman Sachs·2025-05-16 06:25Investment Rating - The investment rating for iFlytek is Neutral, with a 12-month price target of Rmb55.30, indicating an upside potential of 15.9% from the current price of Rmb47.70 [9]. Core Insights - iFlytek has initiated a diverse AI monetization strategy targeting ToC, ToB, and ToG clients, focusing on API token fees, industry-specific AI solutions, and SOE/government projects [2][3]. - The company launched an "On-Prem LLM All-in-One solution" for enterprises, allowing clients to deploy multiple AI models on a single machine, enhancing operational efficiency [3]. - iFlytek's AI models are being integrated into automotive solutions, with applications in smart cockpits and audio systems, showcasing the company's expansion into the automotive sector [4][6]. Summary by Sections AI Monetization Strategy - iFlytek's AI monetization strategy includes the Spark LLM API token fee, industry solutions in education, healthcare, and automotive, and customized AI model services for SOE/government projects [2]. - The upgraded Spark reasoning model X1 was released in April 2025, with plans for continued in-house development of AI foundation models to optimize performance [2]. Enterprise Solutions - The "On-Prem LLM All-in-One solution" launched in April 2025 supports multiple AI foundation models for enterprise clients, allowing for customized solutions across various industries [3]. - Key features of the solution include Spark Insight for sales conversation analysis, OceanDoc for presentation generation, and Spark Wallex for integrating AI into hotel software applications [3]. Automotive Applications - iFlytek showcased its smart cockpit and smart audio solutions at the Autoshow Shanghai, with AI models adopted by over 16 automotive brands [4][6]. - The AI agents in the smart cockpit can summarize user-generated content and provide tailored recommendations, enhancing the passenger experience [6]. Financial Projections - Revenue projections for iFlytek indicate growth from Rmb23.34 billion in 2024 to Rmb41.02 billion by 2027, with EBITDA expected to rise from Rmb2.53 billion to Rmb6.39 billion in the same period [9]. - The company is expected to achieve an EPS of Rmb0.24 in 2024, increasing to Rmb1.95 by 2027, reflecting strong growth potential [9].