Newsletter summary
Revenue of the company in 2023Netmarblecryptocurrency.15 billion yuan, net profit 12.Netmarblecryptocurrency.58 billion yuan, deducting 660 million yuan from non-net profit. The investment business has made a significant contribution, AI investment is firm, and diversified AI business has landed. It is estimated that the EPS for 2024-2026 will be 0.70 shock 0.82 shock 0.88 yuan, maintaining a "buy" rating. Risks include AI progress, operational business and regulatory risks.
Text of news flash
[revenue increased by 3.78% in 2023, net profit increased by 9.15%, net profit decreased by 42.86% after deducting non-return net profit]
In 2023, the company achieved revenue of 4.915 billion yuan, an increase of 3.78% over the same period last year, belonging to the shareholders of the parent company.NetmarblecryptocurrencyThe net profit was 1.258 billion yuan, an increase of 9.15% over the same period last year. However, after deducting non-recurring gains and losses, the net profit attributable to the shareholders of the parent company was 660 million yuan, down 42.86 per cent from the same period last year.
In the fourth quarter of 2023, the company's revenue was 1.234 billion yuan, down 7.73% from a year earlier and 1.74% from a month earlier. The net profit attributed to the shareholders of the parent company was 930 million yuan, an increase of 154.02% over the same period last year, compared with a loss of 30 million yuan in the third quarter of 2023.
In 2023, the company also realized net investment income of 255 million yuan and fair value change net income of 1.283 billion yuan, of which 659 million yuan mainly came from the fair value change income of financial assets held by Opera, which was included in non-recurrent income.
The company's overseas information distribution and metasonic platform Opera achieved revenue of US $397 million in 2023, an increase of 19.87% over the same period last year, and a net profit of US $169 million, an increase of 1,026.83% over the same period last year. Skywork AI achieved a deduction of 321 million yuan in non-net profit in 2023, an increase of 23.78 percent over the same period last year.
The net profit of idle touting and mutual entertainment in the domestic chess and card business was 185 million yuan, down 46.84% from the same period last year. The company's global game research and development business is expected to remain stable.
The company's sales, management and R & D expenditure rates in 2023 were 32.95%, 17.52% and 19.69% respectively, down 0.12%, 4.26% and 5.11%, respectively, compared with the same period last year.
Management fees increased by 37.08% to 861 million yuan compared with the same period last year, mainly due to the increase in equity incentive fees. The company firmly promotes the All in AI strategy and sets up a talent team, which correspondingly increases staff costs, technical service fees and server amortization fees.
By the end of 2023, the total number of R & D personnel of the company has increased to 1508, an increase of 19.12% compared with 1266 at the end of 2022, of which more than 300 have master's degrees or above.
The company has announced a restricted stock incentive program aimed at motivating AI's core technical staff. The plan proposes to grant 62.46 million restricted shares (about 5.1 per cent of total share capital) to incentives.
The company expects that if granted in April 2024, the incentive cost will reach 1.3 billion yuan and will be amortized in 2024-2027.
The company has built multiple business matrices such as AI big model, AI search, AI music, AI video, AI social networking and AI games.
The AI model Tiangong iterated to version 3.0 on April 17, 2024, becoming one of the open source MoE models with the largest model parameters and the strongest performance in the world.
The AI search function is constantly upgraded to meet the needs of retrieval, creation and entertainment in many fields. The AI music model "Tiangong SkyMusic" was released on April 17, 2024.
AI social product Linky has been launched overseas. The AI game "Club Koala" began testing on April 18, 2024. The company is also active in AI video, AI comics and other areas of layout.
Maintain the forecast that the EPS of 2024-2025 and the new 2026 will be 0.700.82 / 0.88 yuan, and the PE of the stock price before that will be 56, 48 and 44X, respectively.
Optimistic about the forward-looking layout of the company in the field of AI, it is expected that the company will rely on its leading advantage to achieve the continuous landing of multi-business layout and open up the growth space.
Risk tips includeNetmarblecryptocurrencyThe progress of AI model and its application is not as expected, the operating business is not as expected, and the risk of industry supervision is not as expected.