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[Brokerage Focus] Tianfeng maintains a buy rating on Bairong Cloud (06608), pointing out that the MaaS business and BaaS insurance industry cloud business are under temporary pressure.
Jingu Financial News | Tianfeng Securities released a research report, in the first half of 2024, Bai Rongyun (06608) recorded revenue of 1.321 billion yuan, up by 6% year-on-year; gross profit was 0.967 billion yuan, up by 8% year-on-year. The growth in revenue and gross profit is mainly attributable to the successful application and commercialization of artificial intelligence (AI) technology. In the first half of 2024, the company's net income was 0.143 billion yuan, down by 31% year-on-year. The main reason is a significant increase in sales and marketing expenses in the first half of the year, rising from 0.461 billion yuan in the same period last year to 0.507 billion yuan, used to enhance the brand and business promotion to improve the company's brand awareness and continued acquisition.
Recently, the stock price of the AI leader Bestway Cloud-W (06608.HK) has soared, expanding its buyback plan, attracting market attention.
During the three days of trading in the Hong Kong stock market during the National Day holiday (October 2 to 4), the Hang Seng Index rose by 7.59%, with technology stocks leading the gains. The Hang Seng Tech Index even soared by 10%, making the Hong Kong stock market one of the strongest performers this year. Despite a general decline in the Asia-Pacific markets on the first trading day after the holiday due to external factors, the Hang Seng Tech Index still recorded a rise of over 35% in nearly 20 days.
Bairong Cloud-W (06608.HK) granted 1.17 million share options.
Grantsky October 8th︱Bairong Cloud-W (06608.HK) announced that on October 8, 2024, the company granted 1.17 million share options under the 2024 stock plan, accounting for approximately 0.28% of the total number of issued B shares on the grant date. The exercise price of the share options granted is HK$11.276 per B share. The board of directors believes that the granting of share options allows the company to use non-cash incentives to attract grantees (i.e. employee participants) to strive to enhance the group's value and achieve the group's long-term goals. At the same time, the grantees will have proprietary rights in the company and become shareholders, aligning their interests with those of the group and the shareholders.
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An Insider At Bairong Lowered Their Holding Recently
Bairong: Has Enough Resources to Support Expansion, Maintain Robust Financial Condition >6608.HK
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104027617 : Bairong is an AI company in a sense that they are developing their own vertical LLM for the use of financial institutions.
Jeff Boyd OP 104027617 : Thank you.
It kind of highlights some of the difficulty in evaluating companies. I do own $BAIRONG-W (06608.HK)$ but the truth is, I can evaluate by nothing more than the financial statements. Sure I would not understand $NVIDIA (NVDA.US)$ either (don't own) but I can say with reasonable confidence that they will be in the lead with regard to designing AI chips and they seem unlikely to be commoditized but will LLMs be commoditized? I have no idea.
I own a position in a company $eGain (EGAN.US)$ that does not call itself an AI company but they do use AI to access company data that apparently they are reasonably competent at helping companies access their data that I think might have some paralells to Bairong except I know EGAN is pretty much strictly in call centers. I've followed EGAN for 25 years and have great confidence in their management to run a business in a competent fashion but whether they have staying power given the changes taking place and fact that their executives are nearing retirement age? None at all.
What can one say? I'm a speculator.
104027617 Jeff Boyd OP : i own Bairong too, it a lot easier to evaluate chinese companies if you know how to read mandarin. Basically unlike the general LLM that developed by OpenAI that need billions of resources to train the model, Bairong's LLM is more vertically suit the financial institutions in China, without huge capex needed to develop and probably the only AI developers that already monetising and profiting in China (maybe globally) as well.
Jeff Boyd OP 104027617 : There are so many limitations on understanding companies. I've always thought that the only way I can understand future risks/prospects is if I have worked for the company and can talk to people who do the real work and even then one never knows that a liability or competitor won't pop up.
So many Chinese companies were trading at such low values I could not ignore them. Lost a fair amount of money but things have obviously turned around recently. Whether it will last, who knows. The actions being taken by Chinese government are aimed at stocks and real estate so my view is that the stimulus will not really have a long term impact on say retailers unless Chinese consumers open their pocketbooks. Got an incredible gain on $MING YUAN CLOUD (00909.HK)$ which I thought would obviously benefit. Don't get a quick gain like that very often so I sold it.
I've gone over to the FUTU site hoping I could talk to Mandarin speakers who might know the companies better as the translation features these days are so incredible. It was possible to have a conversation but investors in China are just as uninformed as most US investors. I also read the Mandarin financial reports but at the end of the day I think it is close to a waste of time although I do understand the accounting and economic issues reasonably well.
I think you may be the first really sharp person I've talked to on either the Moomoo or FUTU web sites. Don't be a stranger o.k.