Guotai Junan Securities: Maintains "buy" rating on AINNOVATION (02121) with a target price of HKD 5.60

Guotai Haitong released a research report stating that it maintains an "overweight" rating on AINNOVATION (02121), with a reference to comparable companies, AI development trends, and the international situation, giving the company a dynamic 2x PS for 2025, with a target price of 5.60 Hong Kong dollars (calculated at a RMB-Hong Kong dollar exchange rate of 0.9307). The bank predicts that the company's operating income for 2025-2027 will be 14.72/17.56/20.59 billion RMB respectively (originally 14.59/16.75 billion RMB for 25-26), and earnings per share will be 2.61/3.11/3.64 RMB respectively (originally 2.58/2.96 RMB for 25-26). Guotai Haitong's main points are as follows: The trend of industrial AI continues, and they are optimistic about the company's performance growth in the new year In 2024, the company achieved operating income of 1.22 billion RMB, with significant improvement in the second half of the year compared to the first half. The proportion of "AI + manufacturing" has significantly increased to 80.3%. The company's gross profit margin has increased to 34.6%. The bank believes that Chinese intelligent industrialization is a development trend, and the demand for artificial intelligence technology to drive digital transformation is still strong. They are optimistic about the company's performance growth in the new year. In 2024, the company continued to promote technological innovation and product upgrades with the Qi Zhi Kong Ming AInnoGC industrial large model as the core. In March 2024, the company launched the Qi Zhi Kong Ming AInnoGC 2.0 version, and the ChatX series generative AI application continued to land on the business side, gaining a deeper understanding of the actual needs and pain points of industrial enterprise customers, integrating industrial scene demands with technological research and development capabilities, and building an AI Agent intelligent development platform for the industrial sector. AI Agent intelligence is becoming the foundation for restructuring traditional business processes in enterprises The company further strengthens the differentiation capability of the AI Agent intelligent development platform to build manufacturing intelligence applications. The company insists on being guided by scene landing, fully considering the production and operation paradigm of manufacturing enterprises, and progressively promoting the landing of high-level intelligent agents on the customer side. The bank believes that the scale landing of AI agents in the B-end is more realistic than the current exploration in the C-end, and AI agents in complex B-end business scenarios will enhance the overall intelligence and realization capabilities of intelligent agents. Risk warning: Industrial demand growth is lower than expected; industrial large model landing and realization are lower than expected.