Finance Associated Press, March 7 (edited by Feng Yi).Today, the AI concept of Hong Kong stocks continues to be strong, and after UBTECH's stock price soared to attract market attention, today's enterprise AI application service provider 4Paradigm (06682HK) is also aiming to replicate the "double a day" surge**.
On March 7, 4Paradigm rose nearly 90% intraday, and as of press time, it still rose nearly 70%, with a transaction of more than 2HK$700 million, with a total market capitalization of HK$46 billion.
However, unlike UBTECH, which still needs to explore the application and implementation of humanoid robots in commercial scenarios, 4Paradigm's products have been widely used in finance, retail, manufacturing, energy and power, telecommunications, and healthcare. The main customers include Industrial and Commercial Bank of China, PetroChina, Sinopec, Baiteng and Budweiser China, all of which are leading benchmark enterprises in their respective industries.
A more mature business model and a revenue level that has begun to take shape may become the advantages of 4Paradigm compared with other AI concept stocks.
According to a report released by CITIC's computer team on March 6, 4Paradigm's main business is to provide platform-centric AI solutions. According to the statistics of CIC Consulting, the company's market share in 2022 will be 226%, ranking first in the industry.
Specifically, 4Paradigm's products have been successively implemented in business scenarios such as anomaly detection of oil pipelines, corrosion detection in sea pipes, and failure of chemical and fan equipment.
The financial industry is represented by smart banking, which mainly includes intelligent marketing, anti-fraud, anti-money laundering, operation optimization and other products, and 4Paradigm has also carried out multi-angle cooperation with large banks such as Bank of Communications, Industrial and Commercial Bank of China, and Agricultural Bank of China to contribute stable income to the company.
In addition, from 2018 to 2022, the number of benchmark customers in the company increased from 38 to 409, which led to the rapid growth of revenue in the same period. From 2018 to 2022, the company's revenue increased from 12.8 billion yuan increased to 308.3 billion yuan, with an average annual compound growth rate of 122%.
It is worth noting that the integrated solution of SageOne software and hardware collaboration under 4Paradigm is also related to the AI server concept that has been hyped in the market recently.
According to the data, as an infrastructure, the platform products are installed in advance on the servers and other related hardware of SageOne products, and the AI algorithm is co-optimized. The optimization algorithm of computing power, network and storage resources can improve the output and performance of AI solutions, and better empower enterprises to quickly improve operational intelligence.
Previously, according to a report by Morgan Stanley, Hon Hai will win Apple's 20,000 AI server orders this year. In addition, the world's four major cloud service providers, Amazon, Microsoft, Google, and Meta, have all invested heavily in building AI servers, and the total capital expenditure of the four major manufacturers will hit a new high this and next year, with a total investment of about $370 billion in two years. The above news also made the market expect high expectations for the future of AI servers.However, in terms of **, the sharp rise of UBTECH and 4Paradigm is still most likely due to the sudden change in the trading structure after being included in the Hong Kong Stock Connect.
Taking the fourth paradigm in the past two days as an example, judging from the trend of institutional funds after being selected for the Hong Kong Stock Connect, the Hong Kong Stock Connect seats are all large scrambles.
Interestingly, the recent trends of 4Paradigm and UBTECH are highly overlapping, and they have also continued to rise after being included in the Hong Kong Stock Connect, which can be said to be the same. Coupled with the current enthusiasm for the concept of AI in the market, the traces of capital speculation are also particularly obvious.
On the other hand, CITIC** also pointed out in the report that due to the small size of the 4Paradigm float and the existence of external disturbances, the valuation may fluctuate greatly.
In particular, the company has been listed for less than 6 months, and the proportion of IPO financing in Hong Kong stocks is low, so the daily trading volume is low, and the current valuation does not fully consider liquidity factors.
**According to the data, before today's surge, the average daily turnover of 4Paradigm in the previous 108 trading days was only HK$6.95 million. As of press time, the stock has traded more than 2HK$700 million, nearly 40 times larger than the previous average daily turnover.CITIC** also said that the company is located in the middle and lower reaches of the AI industry chain, which is affected by the supply of upstream computing power. Considering the uncertainty of the global environment, along with the in-depth adjustment of the global industrial structure, international frictions, external sanctions and other events will have an uncertain impact on the company's valuation system.
In March 2023, the U.S. Department of Commerce added 28 Chinese entities to the Entity List for unreasonable reasons such as involving ***, including 4Paradigm, Hong Kong BGI, Inspur Group, Loongson Zhongke and other companies.