CICC has released a research report maintaining its revenue forecasts for MININGLAMP-W (02718) for 2026 and 2027 largely unchanged. However, considering the company's plans to increase investment in the research and development of edge-side models and computing power deployment, the bank has revised its adjusted net profit forecasts for 2026/2027 downward from RMB167 million/RMB299 million to -RMB192 million/RMB110 million, respectively. The report expresses optimism regarding the long-term growth potential of the company's Agentic Services business, maintaining an Outperform industry rating and a target price of HK$293, which corresponds to a 21x 2026e price-to-sales ratio. The company currently trades at 15x and 11x its 2026e and 2027e P/S ratios, suggesting a potential upside of 44%.

The main points from CICC's analysis are as follows:

Revenue for the full year 2025 was largely in line with the bank's expectations, while adjusted net profit exceeded forecasts. MININGLAMP-W reported 2025 revenue of RMB1.426 billion, a year-on-year increase of 3.2%, essentially meeting expectations. Adjusted net profit was RMB42.043 million, achieving a turnaround to profitability and surpassing expectations, attributed to operational leverage effects enabled by AI.

The company's business structure showed optimization. Core strategic revenue for 2025, excluding industry solutions, increased by 8.5% year-on-year to RMB1.36 billion. Revenue from the Data Intelligence business grew 0.5% year-on-year to RMB1.26 billion, within which Marketing Intelligence revenue decreased by 1.7% to RMB718 million, while Operational Intelligence revenue increased by 3.7% to RMB542 million. The newly established strategic segment, Agentic Services, generated revenue of RMB100 million.

The company is focusing on edge-side models and has launched its Agentic Services business. The business model is evolving from traditional software sales to a performance-based fee structure, replacing manual effort with computing power and deeply integrating with client delivery outcomes. Current application scenarios include closed-loop performance advertising, closed-loop brand advertising, closed-loop content e-commerce, and short video drama production and distribution. The company believes edge-side models offer advantages in data security and marginal costs. Looking ahead to 2026, management indicated that Agentic Services are expected to expand beyond marketing into other sectors and advance globally, becoming a significant contributor to revenue.

The application of AI tools has significantly enhanced operational efficiency and profitability. The gross profit margin for 2025 was 55.4%, an increase of 3.8 percentage points year-on-year, primarily due to efficiency gains from AI tool implementation, with the company noting full internal adoption of its DeepMiner platform. The adjusted operating profit margin was 1.8%, up 1.7 percentage points year-on-year. The adjusted net profit margin for the year was 2.9%, an improvement of 6.2 percentage points, achieving profitability thanks to the operational leverage provided by AI.

Risk factors include technological iteration, intensifying competition, and risks associated with market acceptance and demand fluctuations.