Date: October 21, 2024
Broker: UOB Kay Hian
Company Overview
SenseTime Group Inc develops AI software products and computer vision software products in China. It is recognized as a leading AI software company focusing on computer vision technologies, serving a broad range of industries.
Stock Data
- Share Price: HK$1.53
- Market Capitalization:
- HK$53,767.9 million
- US$6,989.6 million
- Shares Issued: 34,527.8 million
- 3-month Average Daily Turnover: US$112.5 million
- 52-week High/Low: HK$1.77/HK$0.58
Recent Performance Highlights
- 2023 Full-Year Revenue: Rmb3.4 billion, making it the largest computer vision software provider in China with over 20% market share according to IDC.
- 1H24 Revenue Growth: 29% YoY, driven by rapid growth in the GenAI business and smart auto business.
Key Takeaways from the 2024 Asian Gems Conference
- Strategic Shift: SenseTime is focusing on expanding its generative AI business, which grew by 256% YoY and accounted for 60% of total revenue in 1H24.
- Overseas Revenue: Rose by 40% YoY in 1H24, contributing to 18% of total revenue.
- Profitability Efforts: SenseTime has proactively reduced its exposure to traditional AI from 74% in 2023 to 30% in 1H24.
Integration and Innovations
- SenseTime’s large language model (LLM) is delivering comprehensive enterprise solutions across various platforms.
- The company is ramping up efforts to improve profitability, with a 26% YoY reduction in losses and a 21% YoY narrowing of net loss in 1H24.
Smart Auto Business Expansion
- Smart auto revenue doubled YoY in 1H24, contributing 10% of total revenue.
- Partnerships with major automotive companies, including BYD, Xiaomi, Audi, Nissan, and Toyota, are enhancing its market presence.
- The introduction of SenseTime’s automotive solutions is anticipated to boost demand, particularly with the expected entry of Tesla’s FSD into the Chinese market.
Financial Overview
Key Financials for FY Ended December
-
Net Turnover:
- 2019: Rmb3,027 million
- 2020: Rmb3,446 million
- 2021: Rmb4,700 million
- 2022: Rmb3,809 million
- 2023: Rmb3,406 million
-
Net Profit (Adjusted):
- 2019: Rmb(4,963) million
- 2020: Rmb(12,158) million
- 2021: Rmb(17,140) million
- 2022: Rmb(6,045) million
- 2023: Rmb(6,440) million
Earnings Revision and Risks
- Risks include intensified competition in the AI industry, lower-than-expected commercialization progress, and domestic/international policy risks.
Share Price Catalysts
- Potential catalysts for share price improvement include the faster-than-expected implementation of consumer-end applications and strong performance in the smart auto business.
This comprehensive overview consolidates all relevant details about SenseTime from the provided PDF.
