Core Viewpoint - The development of AI technology is evolving from Copilot to Agent, with TaxFriend Co., Ltd. launching the first Agentic platform "Smart Factory" to reconstruct financial and tax services through human-machine collaboration [1] Group 1: AI Technology Evolution - The transition from Copilot to Agent signifies a shift towards AI systems that can independently complete tasks, enhancing operational efficiency [3] - While Agent applications are becoming more prevalent, Copilot functionalities are still relevant in complex tasks requiring human oversight [3][5] Group 2: Application in Financial and Tax Services - The financial and tax sectors are identified as suitable for AI Agent applications due to their high certainty and clear regulatory boundaries [5] - AI Agents can significantly improve efficiency in these sectors, but human intervention remains necessary for ethical and responsibility reasons [5] Group 3: Industry Challenges - The "square cost curse" presents a challenge in AI development, where performance improvements lead to exponential cost increases, particularly in large model training [6] - TaxFriend is addressing this by optimizing their AI Agent for specific business needs to enhance user experience rather than solely focusing on cost reduction [6] Group 4: Market Dynamics and User Willingness to Pay - The B2B market for AI Agents is characterized by strong demand for cost reduction and efficiency improvements, with potential for faster commercialization compared to B2C [7] - Recent AI product launches have shown an increase in user willingness to pay, driven by tangible benefits and clear ROI from AI applications [9][10] Group 5: Competitive Landscape - The AI Agent market is expected to see increased competition as advancements in large models create new opportunities, leading to a proliferation of financial and tax AI products [11] - The key to success will be the accuracy of AI applications and their ability to meet industry-specific needs, with a focus on real-world effectiveness [12]

Core Viewpoint - The company is experiencing short-term pressure on its business performance, but there are expectations for improvement in the fundamentals by 2025 due to accelerating fiscal and tax reforms and the ongoing development of the digital economy [2][5]. Financial Performance - In Q1 2025, the company reported revenue of 1.173 billion yuan, a year-on-year decrease of 22.71%, and a net profit attributable to shareholders of -315 million yuan [1]. - For the full year 2024, the company achieved revenue of 8.309 billion yuan, down 33.93% year-on-year, with a net profit attributable to shareholders of 15.95 million yuan, compared to 203 million yuan in the same period of 2023 [1]. Business Segments - In 2024, the digital tax business generated revenue of 3.547 billion yuan, a decline of 40.23%, with a gross margin of 33.56%, down 8.99 percentage points [3]. - The smart products business reported revenue of 2.310 billion yuan, also down 40.20%, with a gross margin of 17.49%, an increase of 0.82 percentage points [3]. - The cybersecurity business generated revenue of 2.389 billion yuan, a decrease of 12.97%, with a gross margin of 15.33%, down 3.26 percentage points [3]. Cost Management - The company maintained stable expense ratios in 2024, with sales, management, and R&D expense ratios at 7.57%, 11.65%, and 8.26%, respectively, reflecting increases of 1.33 percentage points, 3.19 percentage points, and 1.01 percentage points year-on-year [3]. Strategic Developments - The company is advancing in the digital government sector, successfully delivering projects for the National Taxation Administration and expanding its business with multiple ministries [4]. - In the enterprise digitalization sector, the company aims to establish itself as a leading digital tax enterprise, maintaining the highest market share in electronic tax invoices [4]. - The company has also expanded its international business, securing projects in Hong Kong and other regions, with a total project value exceeding 3 billion Hong Kong dollars [4]. Future Outlook - The company is expected to benefit from the acceleration of fiscal and tax reforms, with projections for revenue of 9.563 billion yuan, 10.813 billion yuan, and 11.995 billion yuan for 2025 to 2027, respectively, and net profits of 189 million yuan, 320 million yuan, and 415 million yuan [6].