External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>SenseTime reported FY24 results: total revenue was up by 11% YoY to RMB3.77bn, below consensus estimate of RMB4.50bn, mainly due to the decline in Traditional AI business revenue; adjusted net loss narrowed by 21% YoY to RMB4.25bn, but worse than consensus net loss estimate of RMB3.53bn, primarily due to the greater-than-expected R&amp;D investment in AI.</li><li>Supported by its growing computing power and enriching industry solutions, management remains upbeat on the Gen AI revenue growth in FY25E.</li><li>We forecast total revenue to grow by 27% YoY in FY25E, driven by the Gen AI business.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SenseTime reported FY24 results: total revenue was up by 11% YoY to RMB3.77bn, below consensus estimate of RMB4.50bn, mainly due to the decline in Traditional AI business revenue; adjusted net loss narrowed by 21% YoY to RMB4.25bn, but worse than consensus net loss estimate of RMB3.53bn, primarily due to the greater-than-expected R&amp;D investment in AI.Supported by its growing computing power and enriching industry solutions, management remains upbeat on the Gen AI revenue growth in FY25E.We forecast total revenue to grow by 27% YoY in FY25E, driven by the Gen AI business.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SenseTime (20 HK) - Gen AI Business Maintains Momentum on Increased AI Investment

<ul><li>SenseTime announced (4 Dec) the completion of a strategic organizational restructuring, after which the company has established a new “1+X” structure: 1) “1” stands for the core business, which will focus on AI cloud services, integration of large models &amp; AI applications, development of general computer vision (CV) models</li><li>2) “X” stands for other ecological businesses within the group including smart auto, domestic robot, smart healthcare, smart retail, etc.</li><li>Each ecological business will 1) designate an independent CEO; 2) have a flexible incentive mechanism and financing channels; 3) use SenseTime’s AI infrastructure &amp; large models (and pay SenseTime on an arm's length transaction basis) to develop AI applications in their respective fields. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SenseTime announced (4 Dec) the completion of a strategic organizational restructuring, after which the company has established a new “1+X” structure: 1) “1” stands for the core business, which will focus on AI cloud services, integration of large models &amp; AI applications, development of general computer vision (CV) models2) “X” stands for other ecological businesses within the group including smart auto, domestic robot, smart healthcare, smart retail, etc.Each ecological business will 1) designate an independent CEO; 2) have a flexible incentive mechanism and financing channels; 3) use SenseTime’s AI infrastructure &amp; large models (and pay SenseTime on an arm's length transaction basis) to develop AI applications in their respective fields. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SenseTime (20 HK) - Restructuring to Focus on Gen AI Business and Accelerate Breakeven Progress

<ul><li>SenseTime announced 1H24 results on 27 Aug: total revenue grew by 21% YoY to RMB1.74bn, largely in line with our estimate; adjusted net loss narrowed by 3% YoY to RMB2.33bn with net loss margin improving by 33ppt YoY to -134%, which is below full-year consensus margin estimate of -79% due to continuous investments in foundations models and generative AI application development.</li><li>Looking ahead in 2H24E, we expect total revenue growth will further accelerate to +33% YoY, driven by the robust growth of Gen AI business.</li><li>We maintain our FY24- 26E total revenue forecast largely unchanged but expect larger adjusted net loss of RMB3.5/2.5/1.7bn over FY24-26E (previous: RMB3.1/2.3/1.6bn), mainly due to more conservative GPM outlook as SenseTime will expand its computing power through a partner network. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SenseTime announced 1H24 results on 27 Aug: total revenue grew by 21% YoY to RMB1.74bn, largely in line with our estimate; adjusted net loss narrowed by 3% YoY to RMB2.33bn with net loss margin improving by 33ppt YoY to -134%, which is below full-year consensus margin estimate of -79% due to continuous investments in foundations models and generative AI application development.Looking ahead in 2H24E, we expect total revenue growth will further accelerate to +33% YoY, driven by the robust growth of Gen AI business.We maintain our FY24- 26E total revenue forecast largely unchanged but expect larger adjusted net loss of RMB3.5/2.5/1.7bn over FY24-26E (previous: RMB3.1/2.3/1.6bn), mainly due to more conservative GPM outlook as SenseTime will expand its computing power through a partner network. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SenseTime (20 HK) - Strengthening Gen AI Competitive Edges

<ul><li>SenseTime reported FY23 financial results on 26 Mar: total revenue declined by 11% YoY to RMB3.4bn in FY23, below consensus estimate of RMB4.3bn, primarily due to the decline in the Traditional AI business as the company shifted its strategic focus to Generative AI business; adjusted net loss widened by 14% YoY to RMB5.4bn in FY23, versus consensus estimate of RMB3.7bn, due to investment in AI infra and impairment loss of RMB1.8bn (mainly for trade receivables of the smart city business).</li><li>For 2024, the company will further accelerate the monetization of generative AI services, which we expect to support its revenue rebound.</li><li>Meanwhile, the company will enhance operating efficiency and improve cash flow conversion capability in 2024, via cutting non-core businesses.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SenseTime reported FY23 financial results on 26 Mar: total revenue declined by 11% YoY to RMB3.4bn in FY23, below consensus estimate of RMB4.3bn, primarily due to the decline in the Traditional AI business as the company shifted its strategic focus to Generative AI business; adjusted net loss widened by 14% YoY to RMB5.4bn in FY23, versus consensus estimate of RMB3.7bn, due to investment in AI infra and impairment loss of RMB1.8bn (mainly for trade receivables of the smart city business).For 2024, the company will further accelerate the monetization of generative AI services, which we expect to support its revenue rebound.Meanwhile, the company will enhance operating efficiency and improve cash flow conversion capability in 2024, via cutting non-core businesses.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SenseTime (20 HK) - Accelerating Generative AI Monetization

<ul><li>SenseTime announced 1H23 financial results on 28 Aug: total revenue resumed positive YoY growth of 1% and reached RMB1.43bn; adjusted net loss narrowed by 7% YoY to RMB2.39bn, in line with our estimate.</li><li>SenseTime optimized its business strategy: reduce exposure to non-core Smart City business and focus on the development of its Generative AI business, revenue of which has already accounted for 20% of 1H23 total revenue.</li><li>We expect the adjustment will refuel total revenue to grow 18% YoY and unleash operating leverage in 2H23E. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SenseTime announced 1H23 financial results on 28 Aug: total revenue resumed positive YoY growth of 1% and reached RMB1.43bn; adjusted net loss narrowed by 7% YoY to RMB2.39bn, in line with our estimate.SenseTime optimized its business strategy: reduce exposure to non-core Smart City business and focus on the development of its Generative AI business, revenue of which has already accounted for 20% of 1H23 total revenue.We expect the adjustment will refuel total revenue to grow 18% YoY and unleash operating leverage in 2H23E. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SenseTime (20 HK) – Focus on Generative AI Business Development

China

SenseTime is a leading artificial intelligence software company that researches, develops, and sells AI software platforms. It provides AI technologies across generative AI, traditional AI, and smart auto, enabling digital transformation for enterprises, smart city management, and applications in IoT, Metaverse, smart health, and automotive. The company was founded in 2014 and is headquartered in Hong Kong.

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SenseTime (20 HK)

SenseTime (20 HK) - Gen AI Business Maintains Momentum on Increased AI Investment

We lower our target price to HK$1.85, which translates into 10.5x FY25E EV/sales in tune with AI-related sector valuation re-rating (previous:...

CMB International

SenseTime (20 HK) - Restructuring to Focus on Gen AI Business and Accelerate Breakeven Progress

SenseTime announced (4 Dec) the completion of a strategic organizational restructuring, after which the company has established a new “1+X” structure

CMB International

SenseTime (20 HK) - Strengthening Gen AI Competitive Edges

SenseTime announced 1H24 results on 27 Aug: total revenue grew by 21% YoY to RMB1.74bn, largely in line with our estimate

CMB International

SenseTime (20 HK) - Accelerating Generative AI Monetization

For 2024, the company will further accelerate the monetization of generative AI services, which we expect to support its revenue rebound.

CMB International

SenseTime (20 HK) – Focus on Generative AI Business Development

SenseTime announced 1H23 financial results on 28 Aug: total revenue resumed positive YoY growth of 1% and reached RMB1.43bn; adjusted net loss...

CMB International

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