Zhao Yin International: Maintains "Buy" Rating for SENSETIME-W (00020) Due to Strong Performance in Generative AI Business

CMB International released a research report stating that it maintains a "Buy" rating on SENSETIME-W (00020) and raises the company's total revenue forecast for 2026 to 2028 by up to 7% to reflect the strong performance of its generative AI business. The company's revenue in the first half of the year grew by 23% year-on-year to 2.91 billion yuan, which roughly meets market expectations. CMB International pointed out that SENSETIME-W has disclosed for the first time that its recurring revenue (RR) for the first half of the year reached 1.14 billion yuan, an increase of 124% year-on-year, accounting for 39% of total revenue, up from 22% in the same period last year, reflecting a successful transition in its business model from one-off project deliveries to a recurring revenue model. During the period, the company's generative AI revenue grew by 28% year-on-year to 2.33 billion yuan, accounting for 80% of total revenue, mainly driven by strong demand for Token Factory and intelligent application services; visual AI revenue grew by 14% year-on-year to 497 million yuan, with growth accelerating compared to 3% for the entire previous year.