IFLYTEK(SZ:002230)2025-08-31 16:21Summary of the Conference Call for Keda Xunfei Company Overview - Keda Xunfei is a leading AI product and solution provider in China, established in 1999, supported by resources from China Mobile and the University of Science and Technology of China [10][21]. Key Financials - For 1H25, Keda Xunfei reported a revenue increase of 17% year-on-year to RMB 10.911 billion, with a net loss of RMB 239 million (net profit margin of -2.2%) [1]. - In 2Q25, revenue grew by 10% year-on-year, with a net loss of RMB 46 million (net profit margin of -0.7%) [1]. - The company’s 2C business segment saw a revenue increase of 38% year-on-year, significantly outpacing the 2B/2G segment [2]. AI Commercialization Strategy - Management outlined three main directions for AI commercialization: 1. Implementation of AI in vertical industries such as education, healthcare, energy, and transportation. 2. Integration of AI in hardware and software innovations, including AI learning machines and translation devices. 3. Expansion into international markets, focusing on regions like Japan, ASEAN, the Middle East, and Latin America, leveraging its "self-controllable" and multilingual advantages [1]. International Revenue Growth - Keda Xunfei's overseas revenue in 1H25 surged by 212% year-on-year to approximately RMB 180 million, accounting for about 2% of total revenue, with expectations for further growth [1]. Medical Sector Development - The company is expanding its medical segment from primary care AI-assisted diagnostics to specialized applications in higher-tier hospitals, with a positive outlook for revenue growth in this area over the next 3-5 years [2]. Capital Raising and Strategic Confidence - Keda Xunfei announced a plan to raise up to RMB 4 billion through a targeted issuance of shares, with RMB 800 million allocated for the development of its Spark Education model and related product upgrades [3]. - The remaining RMB 3.2 billion will be used to supplement working capital, reflecting management's confidence in the long-term AI strategy [3]. Valuation and Investment Rating - The target price for Keda Xunfei is maintained at RMB 60.00, with a "Buy" rating based on a DCF model (WACC: 7.8%), corresponding to a 2025E P/S of 4.5x and PSG of 0.24x [4]. Market Performance - As of August 22, 2025, Keda Xunfei's stock price was RMB 52.22, with a market capitalization of RMB 121 billion (approximately USD 16.8 billion) [5][21]. - The stock has a 52-week price range of RMB 57.45 to RMB 33.32 [5]. Risks and Challenges - Key risks include potential tightening of government budgets, macroeconomic deterioration affecting IT spending, competitive pressures leading to slower sales growth, and the financial burden of ongoing investments in large language models [11]. Analyst Insights - Analysts rated the industry structure and regulatory environment as stable, with no immediate catalysts expected in the next three months [13]. This summary encapsulates the essential points from the conference call, highlighting Keda Xunfei's financial performance, strategic direction, and market outlook.