Investment Highlights:

Event: Recently, the company released a performance report. According to the company's announcement, the revenue in 2024 will be 887 million yuan (+7.14% year-on-year), the net profit attributable to the parent company will be 61 million yuan (-0.90% year-on-year), and the net profit not attributable to the parent will be -94 million yuan, and the loss will expand. In Q4 alone, the company's revenue was 374 million yuan (+3.34% year-on-year), net profit attributable to the parent company was 50 million yuan (-12.54% year-on-year), and net profit attributable to the parent company was 38 million yuan (-104.40% year-on-year). The results were broadly in line with expectations.

Breaking through key markets, the income of the education industry is under pressure. According to the company's announcement, under the macro background of weak global economic growth and complex and changeable international situation, the domestic industry has maintained a steady and progressive trend, but industrial enterprise customers are increasingly strict in controlling costs. Incremental financial spending is still in the pipeline, school customers have also continued to be under financial pressure, and the demand for CAD for the educational version is relatively flat. The company's centralized training for overseas channel providers in the third quarter has ended, and with the advancement of customer verification of new versions of products and the continuous optimization of the dealer system, it is expected that the overseas performance growth performance in the fourth quarter will return to the right track. In addition, the company further focuses on resources, with the optimization and upgrading of core products and breakthroughs in key markets, it is expected that new commercial 3D products will maintain rapid growth and drive the overall performance to achieve positive growth.

The demand structure of the industry is being reshaped, and AI+CAD counts down. 1) Industrial software giants bet on AI. According to the Home of Intelligent Manufacturing, Autodesk announced the layoff of 1,350 employees while delivering a strong financial report; Dassault Buys Contentserv for €220 Million to Strengthen AI Capabilities. AI and cloud computing may dominate the industry in the future. 2) Autodesk beta generative AI model Bernini. Jointly developed with the Chinese University of Hong Kong, it has functions such as transformation sketches and multi-shape variants, similar to configuring a supercar engine for a traditional design "marathon". 3) Dassault's generative AI model, Aura, will be officially launched soon. Developed in collaboration with French start-up Mistrel, it has features such as automatic drawing creation, intelligent insertion of components, and AI production of 3D solutions.

As a key strategy for the company, AI is expected to drive the company's business expansion. 4) Rapid opening of traditional job substitution. In fact, some designers' daily work has shifted from structural design to training AI. In the future, if large CAD models are fully commercialized, customers will be able to customize and optimize models based on their own data, further shorten the design cycle, and unlock commercial value.

Investment Opinion: Maintain "Buy" rating. Considering the sluggish domestic education demand, the mature product line 2D CAD is under pressure in the short term, and the profit forecast is lowered. It is estimated that the 24-26 revenue forecast value is 8.87/10.24/1.209 billion yuan (the previous value is 9.49/11.57/1.426 billion yuan), and the net profit attributable to the parent company is 0.61/1.18/189 million yuan (the previous value is 0.80/1.34/202 million yuan). The company's core product 3D CAD is in the new product cycle, still maintaining rapid growth, and has recently carried out AI+CAD internal testing, and the test version has AI intelligent design functions. We take the average valuation level of comparable companies in 2025, that is, PS=15.4x, corresponding to a target market value of about 15.8 billion yuan, about 36% of the growth space. Maintain "Buy" rating.

Risk warning: 3D product iteration is less than expected; The market competition pattern is less than expected; Penalties imposed by the exchange for irregularities in the process of appointing independent directors, etc.