Core Viewpoint - The report from Haitong International highlights the launch of the "SUPA" model and a new paradigm by Dingjie Smart, indicating a positive long-term growth outlook for the company with a target price of 68.56 yuan, maintaining an "outperform" rating [1] Group 1: AI and Digital Transformation - AI is recognized as a crucial driver of new productivity, with digital transformation being essential for the survival and development of enterprises [1] - The value of AI lies in its ability to transcend human limitations, enhancing productivity by addressing labor shortages, capability gaps, and creating value in previously unsolvable areas [1] Group 2: Future Business Strategy - The company's future vision includes "one model," "two cores," and "three types of intelligent agents," aimed at helping businesses innovate productivity through data and intelligent technologies [1] - The AI strategy for enterprises involves three levels of advancement: cost reduction and efficiency improvement, business expansion for new growth, and paradigm reconstruction for boundary-breaking growth [1] Group 3: Competitive Edge and Application - Future competitiveness of enterprises will depend on the density of AI applications, which are expected to accelerate exponentially [1] - The application landscape includes general products and industry-specific suites, such as ChatFile for unstructured knowledge queries, design generation for 2D/3D CAD, and "Nana" for personal and executive assistance [1] - Industry cloud solutions are also highlighted, including supply chain integration through parts cloud, a closed-loop focus on pre-sale to post-sale in equipment manufacturing cloud, and the restructuring of financial reporting processes through the "Smart Consolidation Report" [1]

Investment Rating - The investment rating for the company is "Accumulate" with a target price of 68.56 CNY [6][12]. Core Insights - The company held a 2025 New Book Innovation Conference, introducing the "SUPA" model and a new paradigm of thinking. The "Athena" platform has completed its core technology loop, and the company is expected to accelerate application density, indicating a positive long-term growth outlook [2][12]. - The report maintains an "Accumulate" rating and raises the target price to 68.56 CNY, reflecting an expected EPS growth of 0.72 CNY, 0.90 CNY, and 1.13 CNY for 2025-2027, respectively. The company is anticipated to achieve a valuation premium due to its differentiated advantages in AI infrastructure and industry-specific applications [12][13]. Financial Summary - Total revenue is projected to grow from 2,228 million CNY in 2023 to 3,373 million CNY in 2027, with a CAGR of approximately 11.5% [4][13]. - Net profit attributable to the parent company is expected to increase from 150 million CNY in 2023 to 308 million CNY in 2027, reflecting a significant growth rate of 26.1% in 2027 [4][13]. - The earnings per share (EPS) is forecasted to rise from 0.55 CNY in 2023 to 1.13 CNY in 2027 [4][13]. Revenue Breakdown - The company's revenue is expected to be driven by various segments, including: - Technical services with a projected revenue of 1,113.71 million CNY in 2024, growing to 1,550.47 million CNY by 2027 [14]. - Self-developed ERP software business, anticipated to generate 662.35 million CNY in 2024, increasing to 1,051.15 million CNY by 2027 [14]. - Outsourced software and hardware business, expected to grow from 554.61 million CNY in 2024 to 771.74 million CNY in 2027 [14]. Valuation Metrics - The company is currently trading at a price-to-earnings (P/E) ratio of 104.13, which is expected to decrease to 50.82 by 2027 [4][13]. - The price-to-sales (P/S) ratio is projected to be 7.02 in 2023, declining to 4.64 by 2027, indicating a potential for improved valuation as earnings grow [13][14].

Core Insights - The entertainment industry is undergoing unprecedented transformation driven by digital technologies such as AI, 5G, and cloud computing, leading to immersive experiences, personalized content delivery, and global dissemination [1] - 37 Interactive Entertainment, a global entertainment giant based in Guangzhou, is leveraging a "culture + technology" dual-driven strategy to lead the digital transformation in the industry [1] - The company aims to promote Chinese culture globally through digital means, creating culturally impactful products since its establishment in 2009 [1] Group 1 - The new global headquarters of 37 Interactive Entertainment is a hub of creativity and efficiency, requiring high-quality network support for thousands of simultaneous operations [2] - The company has partnered with Huawei to implement a high-bandwidth, low-latency network solution, enhancing the digital transformation process [2][4] - The integration of AI technology into the AirEngine series Wi-Fi 7 AP has resulted in a high-quality, automated smart campus network, significantly improving operational efficiency [4] Group 2 - 37 Interactive Entertainment has established a global digital link to overcome cultural barriers, enabling cultural IP products to be enjoyed globally with low latency and high quality [4] - The company has developed an "AI three-step" strategy to create a digital matrix covering research and operational processes, enhancing efficiency in product testing and advertising [4] - The proprietary industry model "Xiao Qi" supports complex office functions, achieving a 90% coverage rate in customer service and translation scenarios [5]