Tianfeng Securities released a research report stating that it has rated Baorong Cloud-W (06608) as a “buy”, with a predicted total revenue of 3.08/3.70/4.34 billion yuan and a net income of 0.39/0.53/0.58 billion yuan for FY2024-FY2026. The target price is HKD 15.5. The bank believes that as the company gradually expands into non-financial areas and benefits from the rapid landing of the industry's large models, the company has great potential for revenue growth in the future.
The bank stated that the company has achieved stable growth of MaaS business revenue and rapid growth of BaaS business revenue by virtue of its higher market share in the field of data analysis and active layout in the generative AI field. The large increase in the company's total revenue in FY2023 is mainly due to the leap in revenue of BaaS-financial industry cloud. The company currently improves its profits mainly through increasing revenue rather than reducing costs. While its expenses continue to grow, it has achieved considerable returns. From FY2019 to FY2023, the company's three expenses as a proportion of revenue have gradually declined, and the adjusted net profit and net profit margin have continued to increase. In the future, the company will jointly use the AI large model to reduce costs and increase efficiency of its internal business while realizing the technology monetization of the company, so that the cost side can be effectively controlled, and it is expected to achieve a breakthrough in profitability in the future.
The report states that with the release of the "Overall Layout Plan for Building a Digital China" and the continuous promotion of the development plan for financial technology, Chinese financial technology companies are facing unprecedented opportunities. The strong support of policies and the continuous progress of technology have promoted the rapid development of financial digitization. Despite facing challenges such as lack of credit data, uneven credit system, and increasing bad loans, the digital transformation and intelligent upgrading of financial services are expected to accelerate the resolution of past problems through the extensive application of big data and artificial intelligence technologies. At the same time, compared with general large models, industry large models show strong potential for landing applications, which can not only accurately adapt to specific business needs, but also effectively improve risk management capabilities. With the continuous progress of technology and the deepening promotion of policies, the development of industry large models will be the core driving force of financial digitization transformation, which is expected to effectively improve financial service efficiency and improve risk control capabilities, bringing profound changes to the financial industry.