20260325-招银国际-商汤-W-00020.HK-FY25_results_beat_on_solid_Gen_AI_business_and_enhanced_operating_efficiency_5页_851kb

SenseTime (20 HK) Summary

Core Content

SenseTime reported its FY25 results, showcasing strong performance driven by its Generative AI (Gen AI) business and improved operating efficiency. The company's total revenue increased by 33% YoY to RMB5.01bn, surpassing the Bloomberg consensus estimate. The adjusted net loss narrowed by 54% YoY to RMB1.96bn, also better than the consensus of RMB2.29bn, due to a 11% reduction in operating expenses and operating leverage.

Main Points

Revenue Growth

• FY25 Revenue: RMB5.01bn (+33% YoY)
• FY26E Revenue Forecast: RMB6.39bn (+27% YoY), driven by a 35% YoY increase in Gen AI revenue
• FY27E Revenue Forecast: RMB7.678bn (+20% YoY)
• FY28E Revenue Forecast: RMB8.946bn (+16.9% YoY)

Gen AI Business

• Revenue: RMB3.63bn (+51% YoY), representing 72% of total revenue
• Operational Compute Power: Increased to 40,400 PetaFLOPS in Mar 2026, up from 25,000 PetaFLOPS in Aug 2025
• AI Applications:
  • Office Scenarios: SenseTime Raccoon served over 15 million individual users and thousands of enterprise customers, with MAU increasing sevenfold in 2025
  • Content Creation: Seko, a short drama creation agent, attracted over 300k creators within a few months of launch
• Future Plans: Launch of a new model based on the second-generation NEO architecture in 2Q26 to enhance multimodal capabilities and drive Gen AI growth

Computer Vision Business

• Revenue: RMB1.08bn (+3% YoY), representing 22% of total revenue
• Growth Phase: Transitioned to a second growth phase with 60% of projects using multimodal and agent capabilities (up from 0% in 2024)
• Overseas and Domestic Demand: Strong growth in overseas markets and recovery in domestic demand

X Businesses

• Revenue: Declined by 6% YoY to RMB302mn, due to the deconsolidation of Autonomous Driving business in August 2025

Key Financial Metrics

Profitability

• Gross Profit Margin (GPM): Declined to 38.8% in FY25 from 44.1% in 2023
• Operating Margin (OPM): Negative 26.0% in FY25, improving to -7.1% in FY26E
• Adjusted Net Profit Margin: Improved to -10.5% in FY25, with forecasts of 1.1% in FY26E and 12.4% in FY27E

EPS (Adjusted)

• FY25: -5.23 cents
• FY26E: -1.80 cents
• FY27E: 0.23 cents
• FY28E: 2.96 cents

Valuation

• Target Price: HK$2.50 (up from HK$2.45)
• Valuation Multiple: Based on 12x FY26E EV/sales
• EV/Sales: 0.9x in FY26E
• P/S: 9.8x in FY26E
• Valuation Premium: SenseTime is valued at a premium to the sector average (5x) due to its leadership in China's Gen AI cloud services and strong AI infrastructure

Financial Summary

Income Statement Highlights

• Revenue: RMB5.015bn in FY25
• Gross Profit: RMB2.056bn in FY25
• Operating Profit: Negative RMB3.514bn in FY25
• Adjusted Net Profit: RMB-1.940bn in FY25, projected to narrow to RMB668.1mn in FY26E and RMB1.102bn in FY27E

Balance Sheet Highlights

• Total Assets: RMB38.906bn in FY25
• Total Liabilities: RMB11.845bn in FY25
• Total Shareholders' Equity: RMB26.719bn in FY25
• Cash & Equivalents: Increased to RMB10.887bn in FY25

Cash Flow

• Net Cash from Operations: RMB-301mn in FY25
• Net Cash from Investing: RMB-3,507mn in FY25
• Net Cash from Financing: RMB5,621mn in FY25
• Net Change in Cash: RMB1,327mn in FY25

Shareholding and Stock Data

• Market Cap: HK$70,843.6mn
• Average 3-Month Turnover: HK$1,526.2mn
• 52-Week High/Low: HK$2.89 / HK$1.28
• Total Issued Shares: 37,090.9mn

Shareholding Structure

• Amind: 18.7%
• SenseTalent Management: 5.2%

Analyst Ratings and Recommendations

• CMBIGM Rating: BUY
• Target Price: HK$2.50
• Current Price: HK$1.91
• Upside/Downside: 30.9%

Conclusion

SenseTime's FY25 results demonstrate a strong Gen AI business and improved operating efficiency. The company is expected to continue its growth trajectory with a focus on enhancing multimodal capabilities and model cost efficiency. The financial outlook shows a narrowing net loss and potential for breakeven in FY26E. The stock is currently valued at a premium to the sector, with a target price of HK$2.50 based on 12x FY26E EV/sales. The company maintains a BUY rating, indicating potential for over 15% returns in the next 12 months.