HKUST Xunfei (002230) 2018 Annual Report Review: AI Application Ecosystem Lands to Improve B + C-end Business Dual Power

HKUST Xunfei (002230) 2018 Annual Report Review: AI Application Ecosystem Lands to Improve B + C-end Business Dual Power
I. Event Overview The company released its 2018 annual report and 2019 first quarter report on April 19.2018 initially achieved operating income of 79.170,000 yuan, an increase of 45 in ten years.41%, accounting for 27.08%; realized net profit attributable to mother 5.42 ppm, an increase of 24 in ten years.71%.The first quarter of 2019 achieved operating income19.580,000 yuan, an increase of 40 in ten years.11%; net profit attributable to mothers1.02 ppm, an increase of 24 in ten years.26%. Second, analysis and judgment to increase research and development efforts, AI helps education, medical, political and legal B-side business rapid development. The company’s R & D transformation accounted for more than 20% of revenue for the sixth consecutive year.Education, politics, law, medical and other key tracks open up new market space.Among them, smart education products achieved revenue of 21.4.4 billion, an increase of 44 in ten years.93%, covering more than 25,000 schools across the country.Focusing on personalized learning scenarios, Zhixue.com has covered 15,000 schools.In addition, the company conducted commercial operations in more than 700 middle schools engaged in the country in 2018, served more than 800,000 students, and produced 300,000 personalized assignments per day.The education business is expected to achieve a high growth rate due to the vast market space, perfect initial layout, and significant brand benefits. The “AI + Politics and Law” products and solutions have been extensively merged in the judicial administrative agencies, high courts, and provincial inspection coverage rates of over 90%.Smart hospital products are applied in the top domestic medical institutions such as the 301 Hospital of the Chinese People’s Liberation Army and the Peking Union Medical College Hospital, serving an average of 600,000 passengers per month. The Xunfei open platform ecosystem continues to develop, and the C-terminal business is welcoming to the end of the 18th. The Xunfei open platform has opened 171 AI capabilities and scenarios, and the number of developers has reached 920,000.In 2018, Xunfei’s open platform successively released iFLYOS, the human-machine interface AIUI3.0, AI services market, forming end-to-end solutions and implementation paths.By the year of the C business, it will have an operating income of 25.1.7 billion, an increase of 96 in ten years.54%; realized gross profit of 12.9.6 billion, an increase of 70 in ten years.77%; through the continuous improvement of product structure and the emergence of brand effects, the proportion of C-end business revenue has continued to increase, and the C-end product repayment cycle has changed, which will contribute to the company’s stable cash flow. The policy guidelines are clear, and the industrial transformation is continuously accelerating. This year, the Central Comprehensive and Deepening Reform Committee meeting adopted the 无锡桑拿网 “Guiding Opinions on Promoting the Deep Integration of Artificial Intelligence and the Real Economy.”The forthcoming conference clarifies the development direction of artificial intelligence in the future, and at the same time highlights the strategic significance of artificial intelligence for it. Future policies continue to catalyze and promote the continuous integration of artificial intelligence and the industry.As the leader in speech AI, HKUST InfoFly has obvious first-mover advantages. Voice interaction promotion will continue to penetrate multiple industries and accelerate the transformation of related industries. Third, investment recommendations are covered for the first time, and recommendation levels are given.We believe that the transformation company’s AI ecological application system is constantly improving, the market layout of key racetracks such as education, politics and law has continued to accelerate and the per capita efficiency has steadily improved. In the future, the company’s profit side will accelerate and match the income side.Therefore, the EPS for 2019-2021 is expected to be 0.33/0.44/0.59 yuan, corresponding to the current price of PE is 106X / 79X / 59X. 4. Risk warning: The artificial intelligence industrialization has fallen short of expectations; R & D cannot achieve the expected results;

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