The AI concept has reached the "deep water area", and foreign technology giants are also facing business model issues. The gap between domestic companies betting on this direction is gradually emerging.

In the third quarter report, the performance of A-share "AI concept stocks" continued to show a differentiated trend: the computing power leader Dawning Information Industry Co., Ltd. maintained stable profitability, the large model leader Kunlun Tech Co., Ltd. changed from profit to loss, and the performance of Tom Cat, which focuses on IP AI interaction, was "disappointing".

Dawning Information Industry Co., Ltd.: Net income increased by 20% year-on-year.

Dawning Information Industry Co., Ltd., which focuses on information technology and AI, saw a slight decline in revenue and a stable increase in net income in the third quarter despite unfavorable factors such as changes in the pace of innovation and tightness in the AI chip supply chain.

In the third quarter of this year, Dawning Information Industry Co., Ltd. achieved operating income of 2.357 billion yuan, a year-on-year decrease of 0.27%. The net profit attributable to shareholders of the listed company was 206 million yuan, a year-on-year increase of 20.11%. The non-net profit after deduction of mother was 92 million yuan, a year-on-year increase of 29.31%.

In the first three quarters, Dawning Information Industry Co., Ltd. achieved operating income of 7.758 billion yuan, a year-on-year increase of 5.03%. The net profit attributable to the parent company was 750 million yuan, a year-on-year increase of 14.78%. The non-net profit attributable to the parent company was 410 million yuan, a year-on-year increase of 16.59%.

Guohai Securities believes that Dawning Information Industry Co., Ltd. achieved stable growth in operating performance in the first three quarters despite unfavorable factors such as changes in the pace of innovation and tightness in the AI chip supply chain, reflecting its enhanced core competitiveness, improved technical strength, and significant results in strengthening independent controllability.

It is reported that the controlling shareholder of Dawning Information Industry Co., Ltd. is the Institute of Computing Technology of the Chinese Academy of Sciences. The company is a leading enterprise in China's core information infrastructure field, mainly engaged in the research and development, and manufacturing of high-end computing, storage, security, and data center related products. By actively deploying intelligent computing, big data, cloud computing and other businesses, it has formed a complete industry chain of "core-end-cloud" integration. The company's liquid-cooled data center infrastructure market share has been the first in the domestic industry for many years, and it has built and operated more than 50 cloud computing centers nationwide, with the largest scale of computing power service network in China.

So far, Dawning Information Industry Co., Ltd. has participated in training, fine-tuning, and reasoning of more than 30 mainstream large models such as GPT series, LLaMA series, and GLM series, such as "Wudao 2.0 "," Purple East Tai Chu"," Wenxin Yi Yan "," Tongyi Qianwen ", and so on. At the same time, the company has developed large model integrated machine, large model storage solutions, and leading immersive phase-change liquid cooling technology and cold plate cooling technology with a market share of over 58% in China's liquid-cooled data center.

Kunlun Tech Co., Ltd.: Loss of 29.83 million in the third quarter.

Kunlun Tech Co., Ltd. continued to decline in the third quarter, changing from profit to loss.

In the third quarter, Kunlun Tech Co., Ltd. achieved operating income of 1.256 billion yuan, a year-on-year increase of 9.27%, and a net loss of 29.83 million yuan, a year-on-year decrease of 120.78%, changing from profit to loss. The non-net loss was 37.29 million yuan, a year-on-year decrease of 120.79%. The net loss per share was 0.02 yuan.

In the first three quarters, Kunlun Tech Co., Ltd. achieved operating income of 3.681 billion yuan, a year-on-year increase of 8.31%, net profit attributable to shareholders of the parent company was 328 million yuan, a year-on-year decrease of 58.26%, non-net profit attributable to shareholders of the parent company was 275 million yuan.

Kunlun Tech Co., Ltd. stated that in the first three quarters of this year, the proportion of overseas business revenue further increased to 84%, an increase of nearly 9 percentage points year-on-year. The overall gross profit margin was 80%, which continued to maintain a high level.

In the financial report, Kunlun Tech Co., Ltd. stated that during the reporting period, the "Tiangong" large model has made significant breakthroughs in logic reasoning ability, text comprehension ability, multi-modal ability, etc. In the application side, the "Tiangong" APP has received a comprehensive iterative upgrade, integrating core functions such as AI search, AI reading, and AI creation, covering many application scenarios such as work, study, and life.

On the AI gaming side, the first AI game "Club Koala" independently developed by Play for Fun game studio under Kunlun Tech Co., Ltd. was unveiled at the Cologne International Game exhibition on August 25th. The UGC game editor Koala Editor embedded in the game helps users achieve zero-code game development, greatly reducing the threshold for game creation.

As of the end of this quarter, Kunlun Tech has received about 6,000 purchased and leased chips, and has about 3,000 chips waiting to be delivered. Currently, the company's computing power is expected to meet the large-scale model computing power needs for the next 1-2 years, except for video AIGC. In addition, in order to establish and maintain long-term core competitiveness in the field of artificial intelligence, Kunlun Tech has previously announced that it will control the AI computing chip company Beijing Ajworth Core Technology Co., Ltd. (hereinafter referred to as 'Ajworth Core Chip') through capital increase. The layout of the industry chain of 'computing infrastructure-large-scale model algorithm-AI application'. Ajworth Core Chip aims to develop a programmable, high-performance NPU product, which is also applied to model training and inference.

In addition, in order to establish and maintain long-term core competitiveness in the field of artificial intelligence, Kunlun Tech has previously announced that it will control the AI computing chip company Beijing Ajworth Core Technology Co., Ltd. (hereinafter referred to as 'Ajworth Core Chip') through capital increase. The layout of the industry chain of 'computing infrastructure-large-scale model algorithm-AI application'. Ajworth Core Chip aims to develop a programmable, high-performance NPU product, which is also applied to model training and inference.

Tom Cat: Net income decreased by 87.53%, and the National Social Security Fund entered the top ten circulating shareholders.

Affected by global macroeconomic weakness and the absence of new product launches during the period, Tom Cat's third-quarter performance continued to decline, and the non-net profit is now 'ankle-cut'.

In the third quarter of this year, Tom Cat's operating income was 340 million yuan, a year-on-year decrease of 16.53%, and the net profit attributable to shareholders of listed companies was 13.64 million yuan, a year-on-year decrease of 87.53%; the non-net profit was only 8.65 million yuan, a year-on-year decrease of 91.90%.

In the first three quarters, Tom Cat's operating income was 1.028 billion yuan, a year-on-year decrease of 18.38%. Net profit attributable to the mother was 200 million yuan, a year-on-year decrease of nearly 50%, and non-net profit was 189 million yuan, a year-on-year decrease of over 50%.

Regarding the reason for the performance decline, Tom Cat explained in the report that the Tom Cat family IP series products are active in the global market, and product data such as MAU (monthly active users) and DAU (daily active users) are stable, but the overall revenue of the company has declined due to factors such as global macroeconomic weakness and the absence of new product launches during the period. At the same time, the company has continued to increase investment in new product development, and development expenses and related fees have increased. In addition, the company's local corporate income tax in Slovenia has increased. These reasons have led to a decline in the company's current profits.

In terms of AI products, Tom Cat stated that the company's domestic and foreign R&D teams are advancing the R&D and testing of three AI application products. Among them, the multimodal AI Tom Cat product developed by the company's domestic R&D team in cooperation with Xihu Xincheng has preliminarily achieved functions such as photo recognition, English speech enlightenment, interest guidance, popular science education, AI-generated pictures, AI-generated picture books, and situational dialogue. The first AI mobile game 'Talking Ben AI' developed by the company's overseas team was launched on August 28, 2023, in Slovenia, Cyprus, South Africa and other regions for the first round of overseas testing; Tom Cat story-telling AI product developed by the company's domestic team is planned to launch the first round of testing in the fourth quarter of 2023.

In addition, Tom Cat's financial report shows that the National Social Security Fund 414 combination entered the top ten circulating shareholders in the third quarter, with a total shareholding of 8.1 million shares, accounting for 0.26% of the circulating shares.