Kunlun(SZ:300418) Guoxin Securities·2025-05-20 11:10Investment Rating - The investment rating for the company is "Outperform the Market" [5][26]. Core Views - The company has experienced continuous revenue growth in 2024 and Q1 2025, but profit performance has been suppressed due to investment income losses and increased R&D expenditures. In 2024, the company achieved revenue of 5.662 billion yuan, a year-on-year increase of 15.2%, but reported a net loss of 1.595 billion yuan, a decline of 226.74% [1][9]. In Q1 2025, revenue reached 1.764 billion yuan, up 46.07%, while the net loss was 769 million yuan, a decline of 310.32% [1][9]. - The company is advancing its AI research and has begun to see initial commercial success. It launched the "Tiangong 3.0" model, which has a parameter scale of 400 billion, making it one of the largest open-source MoE models globally. The AI social application has achieved monthly revenue exceeding 1 million USD, marking it as one of the fastest-growing Chinese AI applications overseas [2][15]. - The overseas market is maintaining high growth, with overseas business revenue reaching 5.15 billion yuan in 2024, a year-on-year increase of 21.9%, accounting for 91% of total revenue [3][18]. Summary by Sections Financial Performance - In 2024, the company reported operating revenue of 5.662 billion yuan, with a net loss of 1.595 billion yuan. The R&D expenses for the year were 1.54 billion yuan, a 59.5% increase year-on-year [1][9]. - For Q1 2025, the company achieved revenue of 1.764 billion yuan, with a net loss of 769 million yuan, primarily due to AI R&D investments and investment income losses [1][9]. AI Development and Commercialization - The company has launched several AI products, including the Tiangong AI search and the SkyReels short drama creation platform. The annualized revenue from AI music reached approximately 12 million USD, while the short drama platform generated about 120 million USD [2][15]. Overseas Market Growth - The overseas business revenue reached 5.15 billion yuan in 2024, with significant contributions from the overseas information distribution and metaverse platform Opera, which achieved revenue of 480 million USD, a year-on-year increase of 21.1% [3][18]. Profit Forecasts - The profit forecasts for 2025 and 2026 have been adjusted to net losses of 439 million yuan and a profit of 37 million yuan, respectively. The company is expected to achieve a profit of 398 million yuan in 2027 [21][22].