Summary of Beisen Holding Limited Conference Call Company Overview - **Company**: Beisen Holding Limited (Ticker: 9669.HK) - **Industry**: Greater China IT Services and Software - **Current Stock Price**: HK$8.24 (as of October 15, 2025) - **Market Capitalization**: Rmb5,445 million - **Price Target**: HK$10.30, indicating a 25% upside potential from the current price [5][66] Key Points and Arguments Financial Performance and Projections - **Break-even Guidance**: Beisen is expected to reach break-even by 1HF26, with a full-year revenue growth guidance of 15-20% YoY [1][8] - **Revenue Growth**: Projected total revenue growth of 17.5% YoY, driven by 21% growth in SaaS and 5% in professional services. Organic revenue growth is estimated at 8-10% YoY, excluding the M&A of Cool College [8][11] - **Profitability Improvement**: Expected gross profit margin (GPM) to improve to 68% (up from 65% in 1HF25) and adjusted net profit margin (NPM) to 3% (up from -7.8% in 1HF25) [8][11] - **Annual Recurring Revenue (ARR)**: Estimated to grow 22% YoY, with AI ARR projected to account for 4-5% of total ARR [8][11] Market Position and Valuation - **Valuation Metrics**: Beisen is trading at 3.6x F26e EV/S, significantly lower than peers averaging 7.9x, indicating it is undervalued [1][5] - **Stock Rating**: Morgan Stanley maintains an Overweight (OW) rating on Beisen, reflecting confidence in its growth potential [5][66] AI Product Demand - **Strong Demand for AI Products**: Management reports high demand for Beisen's AI products, particularly AI Interviewer, with a notable increase in contracts. The AI product line is expected to synergize well with traditional software offerings, enhancing upselling opportunities [8][11] Additional Important Insights Risks and Challenges - **Downside Risks**: Potential risks include a slowdown in China's macroeconomic growth, execution risks in targeting large enterprises, and intensified domestic competition [14] - **Upside Risks**: Faster revenue growth from mid-large enterprises and improved operational expense control could enhance profitability [14] Financial Metrics Overview - **Revenue Projections**: - FY25: Rmb 1,113 million - FY26e: Rmb 1,280 million - FY27e: Rmb 1,437 million [5][11] - **EBITDA Projections**: - FY25: Rmb 35 million - FY26e: Rmb 75 million - FY27e: Rmb 135 million [5][11] Conclusion - Beisen Holding Limited is positioned for significant growth with a strong focus on AI products and improving profitability metrics. The current valuation presents a compelling investment opportunity, despite potential macroeconomic and competitive challenges.