Dawei Yuan, Chairman and CEO of 4Paradigm, reiterated that 4Paradigm's mission is to be an AI-driven enterprise software company.
Chinese leading AI-powered enterprise software company 4Paradigm (6682:HK) recently announced its annual performance for the year ended December 31, 2023, marking its first annual report since its listing on the Hong Kong Stock Exchange on September 28, 2023, becoming the "industry's leading AI-powered enterprise software company".
According to the annual report, 4Paradigm achieved a revenue of CNY 42.0 billion in 2023, a year-on-year increase of 36.4%; gross profit was CNY 19.8 billion, a year-on-year increase of 33.2%, with a gross profit margin of 47.1%. From 2019 to 2023, 4Paradigm's revenue grew at a compound annual growth rate of 73.9%.
Additionally, 4Paradigm's adjusted net loss continued to decrease year-on-year since 2021, with a significant reduction of CNY 88.88 million in 2023, a year-on-year decrease of 17.6%, with an adjusted net loss rate of 9.9%, indicating a clearer path to profitability. Furthermore, 4Paradigm remains highly committed to technological research and development, with R&D investment exceeding CNY 1.7 billion in 2023, and an R&D expense ratio exceeding 40%.
Established in 2014, 4Paradigm focuses on AI-empowered digital transformation across various industries, including finance, energy, telecommunications, transportation, manufacturing, healthcare, and retail. In 2023, 4Paradigm provided AI services to 445 enterprise users, including 139 benchmark users (Fortune Global 500 companies or listed companies), with a year-on-year increase of 33.7%, generating an average revenue of CNY 18.38 million per benchmark user.
Currently, 4Paradigm has established three main business segments: 4Paradigm Sage AI Platform, 4Paradigm SHIFT Intelligent Solutions, and 4Paradigm AIGS AI Services.
The Sage AI Platform serves as the core of 4Paradigm's entire business, enabling the scalable implementation of AI applications through a low-threshold, low-cost AI modeling process. The platform has built over 10,000 models to date and supports the development of various types of models, including generative, decision-making, and visual AI, providing enterprises with a wide range of model choices. According to IDC research, the Sage AI Platform has consistently ranked first in China's machine learning platform market share since 2018 and first in China's machine learning operations platform (MLOps) vendor evaluation rankings.
In 2023, the Sage AI Platform achieved a revenue of CNY 25.1 billion, a year-on-year increase of 68.0%, accounting for an increased proportion of total revenue to 59.6%, with a growth scale exceeding 10 billion yuan.
According to 4Paradigm's management, the 5.0 version of the Sage AI Platform is scheduled to be released by the end of March this year, introducing enterprise-level AI Agent capabilities to further promote the scalable use of AI technology.
While achieving business scalability, 4Paradigm is gradually expanding its business footprint. In 2023, the revenue of the SHIFT Intelligent Solutions business was CNY 12.8 billion, a year-on-year increase of 7.4%, accounting for 30.5% of total revenue.
It is worth noting that several leading securities firms have recently granted "buy" / "hold" ratings to 4Paradigm. China International Capital Corporation believes that under the trend of enterprise intelligence, with the rapid development of AI technology, 4Paradigm is expected to continuously increase its market share and sustain its growth with its deep industry expertise. CITIC Securities pointed out that as a leader in the AI platform field, 4Paradigm's profitability is increasingly strengthened under the drive of economies of scale. Huatai Securities emphasized that 4Paradigm's accumulated customer resources in the enterprise service software field are an early advantage in entering the AIGS market, and it is optimistic that 4Paradigm will combine generative AI with enterprise software to enhance user experience and promote the commercialization of AI.