CICC: Maintaining Paradigm Intelligence (06682) Outperforms the Industry Rating Target Price of HK$40

The Zhitong Finance App learned that CICC released a research report stating that it will keep Paradigm Intelligence's (06682) 26e/27e revenue and profit forecast unchanged, and keep the company's outperforming industry rating and target price of HK$40 unchanged, corresponding to 1.2 x 27e P/S. Currently trading at 0.8 x 27e P/S, with 54% upside compared to the present.

CICC's main views are as follows:

Paradigm Intelligence's 1H26 performance is in line with this forecast

The company announced 1H26 results: achieving operating income of 3,765 billion yuan, an increase of 43.4% over the previous year; net profit to mother of 119 million yuan, adjusted net profit of 150 million yuan, turning a loss into a profit. The company's 1H26 revenue and net profit attributable to mother were at the top of the previous profit forecast range, and the results were in line with this forecast.

The API business has become the core growth engine, and the basic AI platform business is stable

1H26's revenue was 3.765 billion yuan, an increase of 43.4% over the previous year. By business: 1) API business revenue increased 860.8% year over year to 464 million yuan, accounting for 12.3% of revenue. 1H26 token calls increased 620% year over year. The company built efficient token production capacity with core technologies such as HAMI vGPU and ModelHub, and the available computing power resources have been expanded to 28,000 PFLOPS. According to the performance report, the company raised the annual revenue guide for the API business to a 20-fold year-on-year increase; 2) AI Platform business revenue was 3,088 billion yuan, an increase of 30.0% over the previous year. According to the company's announcement, as of 1H26, the AI platform business had an active order volume of 7 billion yuan. The core incremental highlight was that the order volume increased 400% over the same period last year, and there is plenty of room for performance fulfillment.

Optimization of operational efficiency

1H26's gross profit margin was 32.8%, and 1H26 sales/management/R&D expenses ratio was 0.8%/2.4%/32.1%, respectively, down 6.4/0.9/1.9ppt from the previous year. 1H26 recorded net other income of 450 million yuan, mainly due to an increase in the fair value of investment projects. As of the end of 1H26, the company's cash and cash equivalents were $1,294 million, down 35.2% from the end of 2025. In order to match the capital requirements for the company's business development, the company's loan scale increased from 202 million yuan at the end of 2025 to 1,660 million yuan; the company currently has a credit line of about 6.6 billion yuan, and the financing channels are relatively diverse.

Risk warning: Technology iteration falls short of expectations; product promotion falls short of expectations; R&D investment puts pressure on profits.