Core Insights - The Chinese large model industry is transitioning from a "technical frenzy" to a more profound "systematic competition" by 2025, with a focus on ecosystem construction and multi-dimensional competition rather than just parameter scale and benchmark rankings [1][2] - The report highlights the "CBDG four-dimensional ecosystem" (Consumers, Businesses, Devices, Government) as a new paradigm for the industry, emphasizing that success depends on efficient interaction across these dimensions [2] Market Overview - The large model market in China is projected to reach CNY 294.16 billion in 2024, representing a 62% year-on-year growth from 2023, and is expected to exceed CNY 700 billion by 2026, with multi-modal models being the main growth driver [7][8] - Multi-modal models are expected to account for CNY 156.3 billion in 2024, making up 53% of the overall market, with key application scenarios including digital humans (24%), gaming (13%), and advertising (13%) [7] Policy Evolution - The development of large models in China has been guided by policy, which has evolved through three key phases: strategic establishment (2017-2020), system construction (2020-2023), and regulatory leadership (2023-2025) [8][10] - Recent policies focus on balancing innovation with safety, establishing a framework for "innovation-driven, foundational reinforcement, scenario-driven, and safety governance" [8] Ecosystem Paradigm - The CBDG ecosystem is characterized by interdependent relationships that create a self-reinforcing cycle, where government policies guide business implementations, businesses develop solutions that serve consumers and devices, and feedback loops optimize these solutions [11][19] - The consumer end serves as a testing ground for application innovation, while the business end is crucial for monetizing technology [14][15] Competitive Landscape - The report outlines a five-dimensional evaluation system for assessing the competitiveness of large model companies, focusing on ecosystem construction, technology research and development, industry empowerment, commercial monetization, and innovation expansion [21] - Companies are encouraged to shift from merely attracting developers to enhancing ecosystem activity and practical performance [24][25] Future Trends - The report predicts three major transformations in the large model industry from 2025 to 2026: a shift from multi-modal cognition to embodied intelligence, a restructuring of the value chain towards application layers, and a balanced approach to safety and innovation in governance [45][46][47] - The industry is expected to see increased collaboration among major players, with a focus on integrating large models into various sectors such as manufacturing and education [47]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is expected to achieve a non-GAAP net profit of 1.88 billion yuan in 2024, representing a year-on-year increase of 59.36% [4] - The company reported a revenue of 23.343 billion yuan in 2024, an increase of 18.79% year-on-year [4] - The company is positioned as a leading player in the AI industry, with significant advancements in its product offerings, particularly the Starfire X1 model [10] Financial Performance Summary - In 2024, the company's revenue was 23.343 billion yuan, with a year-on-year growth of 18.79% [4] - The net profit attributable to shareholders was 560 million yuan, a decrease of 14.78% year-on-year, while the non-GAAP net profit was 1.88 billion yuan, up 59.36% [4] - For Q1 2025, the company reported a revenue of 4.658 billion yuan, a year-on-year increase of 27.74% [4] Business Segment Performance - The company’s revenue from smart education reached 7.229 billion yuan, growing by 29.94% year-on-year [5] - Revenue from the AI open platform was 5.172 billion yuan, an increase of 31.33% year-on-year [5] - The consumer business generated 2.714 billion yuan, with a year-on-year growth of 20.8% [5] Future Projections - Revenue projections for 2025, 2026, and 2027 are 28.159 billion yuan, 34.378 billion yuan, and 42.283 billion yuan, respectively, with growth rates of 21%, 22%, and 23% [11] - The net profit attributable to shareholders is expected to be 713 million yuan in 2025, 923 million yuan in 2026, and 1.255 billion yuan in 2027, with growth rates of 27%, 29%, and 36% respectively [11] Valuation Metrics - The current stock price is 45.49 yuan, with projected P/E ratios of 147, 113, and 83 for 2025, 2026, and 2027 respectively [10][12] - The company maintains a gross margin of 42.63% for 2024, which is stable compared to the previous year [9]