Kunlun(SZ:300418) Guoyuan Securities·2024-05-15 10:30Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 20% in the next six months compared to the Shanghai Composite Index [11]. Core Views - The company achieved a revenue of 4.915 billion yuan in 2023, a year-on-year increase of 3.78%, and a net profit attributable to shareholders of 1.258 billion yuan, up 9.15% year-on-year. However, the non-recurring net profit decreased by 42.86% to 660 million yuan [2][3]. - The company has significantly increased its R&D investment, with annual R&D expenses rising to 970 million yuan, representing a 19.69% R&D expense ratio, an increase of 5.11 percentage points from the previous year [2]. - The company is advancing its AGI strategy, having launched its first domestic AI search product, TianGong AI Search, and the first self-developed music SOTA model, TianGong SkyMusic, which leads globally in the AIGC vertical [2][3]. Summary by Sections Financial Performance - In 2023, the company reported a revenue of 4.915 billion yuan, with a year-on-year growth of 3.78%. The net profit attributable to shareholders was 1.258 billion yuan, reflecting a 9.15% increase. However, the non-recurring net profit fell by 42.86% to 660 million yuan [2][3]. - For Q1 2024, the company recorded a revenue of 1.208 billion yuan, a slight decline of 0.79% year-on-year, and a net loss attributable to shareholders of 187 million yuan [2]. R&D and Strategic Initiatives - The company has increased its R&D investment, with expenses reaching 970 million yuan, resulting in a R&D expense ratio of 19.69%, up 5.11 percentage points from the previous year [2]. - The AGI strategy is progressing, with the launch of TianGong AI Search and the TianGong SkyMusic model, which has accumulated over 10 billion quality data resources [2][3]. Profit Forecast - The company is expected to achieve net profits of 831 million yuan, 929 million yuan, and 1.012 billion yuan for 2024, 2025, and 2026, respectively. The corresponding EPS is projected to be 0.68 yuan, 0.76 yuan, and 0.83 yuan, with PE ratios of 55, 50, and 46 times [3].