CITICS International has issued a research report maintaining its "buy" rating on BAIRONG-W (06608). Despite the company's impressive first-half performance, considering potential negative impacts from new lending assistance regulations taking effect in October, the firm has conservatively lowered its 2025 and 2026 financial forecasts while adding 2027 projections. The expected net profit attributable to shareholders for 2025-2027 is RMB 318 million, RMB 396 million, and RMB 461 million respectively. Based on historical valuation levels and future growth prospects, CITICS International has assigned a 15x PE ratio for 2026 and raised the target price to HK$14.3.
Key observations from CITICS International include:
**Strong Revenue and Profit Growth with Improved Profitability in H1 2025**
The company recorded revenue of RMB 1.612 billion in H1 2025, representing a 22% year-over-year increase, with gross margin remaining stable at 73%. Net profit reached RMB 201 million, up 41% year-over-year, with profit growth outpacing revenue growth, indicating enhanced profitability.
**MaaS Business Performance**
As the company's cornerstone business, MaaS generated revenue of RMB 502 million in H1 2025, up 19% year-over-year. Growth was primarily driven by expanded application areas and enhanced product competitiveness through AI algorithm optimization. The MaaS business, based on decision-making AI technology, integrates various model products for different commercial scenarios into different modules, efficiently serving financial service providers through API interfaces. Customers can flexibly deploy various models according to their query requirements. MaaS charges service fees or annual fees based on query volume, and as scale expands, costs are rapidly amortized, enabling stable and sustained profit generation.
**BaaS Business Development**
The BaaS business, based on generative AI technology, utilizes the proprietary AIVoiceGPT to assist institutions with intelligent marketing and operations, significantly improving operational efficiency in credit, wealth management, insurance, and internet technology asset management. BaaS charges technical service fees or commissions based on facilitated transaction volumes, with no upfront fees before generating any revenue for institutions, making it more attractive for customer trials and rapid business expansion.
**Financial Industry Cloud Leading Growth**
Financial industry cloud achieved revenue of RMB 857 million in H1 2025, up 45% year-over-year. Based on the proprietary large language model BR-LLM, the company has launched a series of innovative products including the Cybot Star enterprise-level intelligent agent platform, digital humans, and VoiceGPT intelligent voice technology, forming a comprehensive AI product matrix. As AI technology integration with scenarios deepens, financial cloud will continue to leverage its advantages in scenario integration and AI technology.
**Insurance Industry Cloud Challenges**
Insurance industry cloud recorded revenue of RMB 253 million in H1 2025, down 19% year-over-year. The insurance industry faced challenges in the first half, and while the company used AI technology to improve business efficiency and customer experience, maintaining continuous premium growth under regulatory requirements for rate and reporting alignment, revenue was negatively affected by declining fee rates.