IFLYTEK(SZ:002230) Haitong Securities·2024-05-10 11:02Investment Rating - The investment rating for the company is "Outperform the Market" [6][21]. Core Insights - The company has maintained steady revenue growth despite short-term profit pressure, achieving a revenue of 19.65 billion yuan in 2023, a year-on-year increase of 4.41%, and a net profit of 657 million yuan, up 17.12% year-on-year [9][12]. - The company is focusing on enhancing its core technology capabilities and actively seizing opportunities in the field of general artificial intelligence, which has led to significant investments impacting short-term profits but laying a solid foundation for future competitiveness [9][12]. - The company's business structure is continuously optimizing, with an increasing proportion of consumer (C-end) business, which is expected to sustain a growth rate of 20%-30% in the long term [10][12]. Financial Data and Forecast - Key financial data for the company includes: - Revenue (in million yuan): 18,820 in 2022, projected to reach 32,331 by 2026, with a CAGR of 21.1% from 2024 to 2026 [5][16]. - Net profit (in million yuan): 561 in 2022, expected to grow to 1,481 by 2026, reflecting a CAGR of 33.1% [5][16]. - Fully diluted EPS (in yuan): projected to increase from 0.24 in 2022 to 0.64 by 2026 [5][16]. - The overall gross margin is expected to remain stable around 41.2% to 42.7% over the forecast period [5][16]. Business Segments Performance - In 2023, the revenue breakdown by business segments showed: - Open platform and consumer business: 6.185 billion yuan, up 33.28% year-on-year - Education sector: 5.851 billion yuan, down 8.86% year-on-year - Smart city business: 3.933 billion yuan, down 11.52% year-on-year - Operator business: 2.096 billion yuan, down 0.05% year-on-year - Smart automotive: 696 million yuan, up 49.71% year-on-year - Smart healthcare: 540 million yuan, up 15.41% year-on-year - Smart finance: 289 million yuan, up 23.01% year-on-year [9][10]. Research and Development Focus - The company is heavily investing in the development of its large model, with 70% of R&D efforts focused on enhancing foundational capabilities, aiming to match the performance of GPT-4 Turbo by mid-2024 [11][12]. - The launch of the "Flying Star" domestic computing platform and the "Xunfei Spark V3.5" model indicates significant advancements in AI capabilities, including improvements in logical reasoning, language understanding, and multi-modal functionalities [11][12]. Future Outlook - The company is expected to achieve revenues of 22.622 billion yuan in 2024, 26.697 billion yuan in 2025, and 32.331 billion yuan in 2026, with corresponding net profits of 849 million yuan, 1.113 billion yuan, and 1.481 billion yuan respectively [12][16]. - The projected dynamic PS for 2024 is between 5-6 times, with a reasonable value range of 49.84 to 59.81 yuan over the next six months [12][16].