Lyon: Upgrades the target price of Shangtang to 2.14 Hong Kong dollars, benefiting from the improvement of AI models and the demand for computing power

Jinshi data news on February 17th, Lyon issued a research report, benefiting from the development of the DeepSeek and its Open SourceAlgorithm, SenseTime (00020.HK)'s generative AI business may be re-evaluated due to the iteration of AI models. At the same time, SenseTime announced earlier that enterprise customers and developers can use the DeepSeek-V3 and DeepSeek-R1 models in the SenseTime's 'Wanxiang Platform'. Lyon expects that with the widespread application of the relevant models, SenseTime's reserves of over 54,000 GPUs will further benefit from the rapid rise in demand for Computing Power. Lyon also pointed out that SenseTime announced a business restructuring last year, focusing on core businesses such as generative AI and computer vision, and is expected to reduce operating expenses. Lyon raised SenseTime's revenue forecast for the next two years by 1% and 3%, and lowered (narrowed) the loss forecast for 2024 to 2026 by 10%, 6%, and 13% respectively, to reflect the reduction in operating expenses after the restructuring; the investment rating was raised from 'hold' to 'outperform the market', and the valuation basis was raised from the original forecast market-to-sales ratio of 8 times to 9.5 times, and the target price was raised from 1.77 Hong Kong dollars to 2.14 Hong Kong dollars.