BOCOM International released a research report raising revenue expectations for FOURTH PARADIGM (06682) by 7-22% for 2025-2027, while maintaining expectations for the company to achieve breakeven in 2025 and slight profitability in 2026. The State Council issued the "Opinions on Deepening the Implementation of AI+ Actions" on August 26, which is expected to benefit the company's business expansion. The target price has been rolled forward to 2026, corresponding to 4 times price-to-sales ratio, with the target price raised from HK$64 to HK$81, maintaining a "Buy" rating.
The firm is optimistic about the company's Prophet platform's ability to effectively help enterprises enhance core competitiveness amid the AI upgrade transformation in traditional industries. The company continues to explore AI+X initiatives, having already established presence in areas including AI+energy storage and Phancy consumer electronics.
The firm expects that as enterprise demand for AI applications continues to increase, average revenue per client will further improve. It is projected that by 2029, the company's revenue will reach 20 billion scale, representing a 30% annual growth rate compared to 2025. As economies of scale continue to emerge, profit margins may reach 8-10%.