20220328-招银国际-商汤-W-00020.HK-Focus_on_AIaaS_plan_in_FY22_9页_1mb

报告摘要

SenseTime (20 HK) Company Update Summary

Core Content and Key Information

SenseTime, a leading AI company in China, reported FY21 revenue of RMB4.7bn, which was in-line with expectations and showed a 36% YoY growth. Despite the revenue growth, the company faced a significant operating loss of RMB3.3bn, which was better than expected. The gross margin slightly declined to 69.7%, while opex control improved, with the opex ratio dropping to 103.7% (-3.4 pct pts YoY).

The company's core revenue streams continue to be Smart City and Smart Business, contributing 87% of total revenue in FY21, up from 83% in FY20. Smart City saw a 57% YoY growth to RMB2.14bn, driven by an increase in the number of cities covered to 140 (+49% YoY). Smart Business also grew by 32% YoY to RMB1.96bn, with 922 customers and an average revenue per customer of RMB2.1mn (+21% YoY).

However, Smart Life and Smart Auto showed weaker performance, with Smart Life declining by 4% YoY to RMB415mn and Smart Auto growing by 16% YoY to RMB184mn. Both segments are still in early monetization phases.

FY22 Strategy and Outlook

In FY22, SenseTime plans to launch its AlaaS (AI-as-a-Service) initiative through its SenseCore platform, aiming to open up AI capabilities for external users. This move is expected to bring recurring revenue but may reduce gross margins in the medium term due to the nature of cloud-based services.

The company's AI infrastructure includes the AIDC in Lingang, Shanghai, which has a peak computing power of 3.74 exaflops. While the AlaaS plan is promising, scaling the business may take time due to competition from cloud service providers.

Earnings and Revenue Forecast

The company has revised its FY22 and FY23 revenue forecasts downward by 8-9% to reflect uncertainty in the macroeconomic environment and potential slowdown in AI adoption. The new target price is HK$7.84, down from HK$8.08, and the earnings forecast shows a reduction in both sales and profit compared to previous estimates.

FY22E Revenue: RMB5,815mn
FY23E Revenue: RMB8,131mn
FY22E Gross Profit: RMB3,987mn
FY23E Gross Profit: RMB5,472mn

The adjusted net profit for FY22E is RMB930mn, and for FY23E is RMB969mn. The net margin is expected to improve from -28.3% in FY21 to -23.7% in FY22 and -18.4% in FY23.

Valuation and Market Position

SenseTime is maintained at a BUY rating, with a target price of HK$7.84, based on a 34x EV/sales multiple for FY22E. The EV/sales ratio is expected to decrease over time, reflecting the growth in sales and improvement in profitability.

Compared to global AI and SaaS peers, SenseTime's EV/sales is lower than the mean of its global counterparts but higher than the median. The gross margin remains strong at 70% in FY21, attributed to its AI software-centric business model.

Financial Summary

Income Statement Highlights

Revenue: RMB4.7bn in FY21, growing at 36% YoY.
Cost of Sales: RMB1.42bn in FY21, contributing to lower gross profit.
R&D Expenses: RMB3.61bn in FY21, a 47% YoY increase, indicating strong investment in technology.
Operating Loss: RMB3.316bn in FY21, lower than feared.
Net Loss: RMB17.14bn in FY21, reflecting challenges in scaling.

Cash Flow Summary

Operating Cash Flow: Negative in FY21, indicating high investment and operational challenges.
Investing Cash Flow: Negative in FY21, due to capital expenditures.
Financing Cash Flow: Positive in FY21, driven by equity financing and debt changes.
Net Change in Cash: RMB5.345bn in FY21, showing improvement in cash flow.

Balance Sheet Highlights

Non-current assets: RMB8.86bn in FY21, with PPE, net at RMB2.909bn.
Current assets: RMB28.08bn in FY21, including cash and equivalents at RMB16.53bn.
Current liabilities: RMB2.795bn in FY21, with trade and other payables at RMB2.29bn.

Key Viewpoints

Strong growth in Smart City and Smart Business continues to be the main drivers of revenue.
AlaaS is a strategic move to generate recurring revenue, but short-term margin pressure is expected.
Earnings revisions reflect uncertainty in the macroeconomic environment and AI adoption pace.
Valuation is based on EV/sales, with revisions in multiples expected as the company scales.
R&D investment remains high, indicating commitment to innovation and long-term growth.

Conclusion

SenseTime continues to lead in the Chinese AI market, with strong revenue growth in key segments and a strategic shift toward AI-as-a-Service. Despite operational losses, the company's focus on R&D and expansion positions it for long-term growth. The revised target price reflects market uncertainty, but the BUY rating is maintained due to strong market position and potential for recurring revenue.