IFLYTEK(002230) 国海证券·2024-04-28 14:30Investment Rating - Buy (maintained) [1] Core Views - The Spark 3.5 upgrade enhances the company's leading position in "technology + ecosystem" for large models [1] - The company's large model capabilities are expected to reach GPT-4V level by the second half of 2024 [3] - The company's revenue and net profit are projected to grow significantly from 2024 to 2026, with revenue expected to reach 23.189 billion, 27.934 billion, and 33.737 billion yuan, respectively, and net profit to reach 830 million, 1.325 billion, and 2.114 billion yuan, respectively [8] Business Performance and Development - In 2023, the company achieved revenue of 19.65 billion yuan, a year-on-year increase of 4.4%, and net profit of 657 million yuan, a year-on-year increase of 17.12% [2] - In Q1 2024, the company achieved revenue of 3.646 billion yuan, a year-on-year increase of 26.27%, but net profit was -300 million yuan, mainly due to an additional investment of approximately 300 million yuan in large model development [2] - The Spark large model has been integrated into various business sectors, including education, healthcare, smart cities, and consumer platforms, with significant industrial application results [4] Large Model Capabilities - The Spark 3.5 model, trained on the "Feixing One" platform, surpasses GPT-4Turbo in language understanding, mathematical ability, and speech interaction, with overall capabilities approaching GPT-4Turbo [3] - The Spark 4.0 model, expected to be released in June 2024, will target the current best level of GPT-4 and is projected to reach GPT-4V and DALL-E3 levels by the second half of 2024 [3] - The Spark model has achieved 97% of GPT-4Turbo's latest version in long-text processing and has launched new capabilities in image-text recognition, intelligent evaluation, and multi-emotion synthesis [3] Business Segments Smart Education - In Q1 2024, the smart education business accounted for 32% of G-end, 26% of B-end, and 42% of C-end revenue [5] - The "Personalized Education" solution has been implemented in 18 regions, covering over 55 cities, districts, and counties [5] - C-end learning devices saw a 99% year-on-year increase in revenue and a 104% increase in gross profit in Q1 2024 [5] Smart Healthcare - As of January 19, 2024, the AI medical assistant covered over 400 districts and counties [5] - The smart hospital solution has been implemented in West China Hospital of Sichuan University, and the diagnostic assistant serves over 40 top public hospitals in China [5] - The medical imaging cloud platform connects over 1,900 hospitals, with a monthly active volume of nearly 20,000 cases [5] - Medical business revenue increased by 110% year-on-year in Q1 2024, with gross profit up 127% [5] Consumer Business - In 2023, the smart office product series and iFlytek smart recorder continued to lead the market [5] - The iFlytek Input Method maintained the highest user growth rate in the industry, with daily active users increasing by 10% year-on-year [5] - Consumer business revenue increased by 63% year-on-year in Q1 2024, with gross profit up 48% [5] Operator, Smart Automotive, and Fintech - In 2023, the company covered 110 million home voice users and shipped over 7.5 million sets of pre-installed intelligent automotive products, with annual online interactions exceeding 10 billion, a 229% year-on-year increase [6] - Automotive business revenue increased by 71% year-on-year in Q1 2024 [6] - The company has established partnerships with major financial institutions, including PICC Technology, ICBC Anhui Branch, and Postal Savings Bank Anhui Branch [6] Open Platform Ecosystem - In 2023, the open platform business revenue was 3.938 billion yuan, a year-on-year increase of 41.61%, accounting for 20.04% of total revenue [7] - The Spark open platform has attracted over 647,000 developer teams, with more than 370,000 large model developers, leading the domestic ecosystem [7] - The company has collaborated with over 100,000 enterprise customers, including Chery Automobile, Pacific Insurance, and China Mobile, to accelerate industry empowerment [7] - The company launched the first open-source large model, Spark Open Source 13B, in January 2024, providing a fully autonomous and free optimization suite for developers, universities, and enterprises [7] Financial Projections - Revenue is projected to grow by 18%, 20%, and 21% year-on-year from 2024 to 2026, reaching 23.189 billion, 27.934 billion, and 33.737 billion yuan, respectively [8] - Net profit is expected to grow by 26%, 60%, and 60% year-on-year from 2024 to 2026, reaching 830 million, 1.325 billion, and 2.114 billion yuan, respectively [8] - EPS is projected to be 0.36, 0.57, and 0.91 yuan per share for 2024, 2025, and 2026, respectively [8]