Goldman Sachs: SenseTime (00020) expands computing platform, bullish on the company's ability to provide multimodal and long-horizon AI Agent capabilities, gives target price of HK$2.03

GMTEight APP has learned that Goldman Sachs issued a research report stating that based on a two-stage DCF valuation of SenseTime (00020), it derives a 12-month target price of HK$2.03, with a WACC of 11.5% and a perpetual growth rate of 2%. The bank recently met with company executives in Hong Kong, with discussion highlights including computing platform expansion, AI strategy, and AI customer demand and customer base expansion. Goldman Sachs is bullish on the company's ability to provide multimodal and long-horizon AI Agent capabilities, which can deliver higher-quality output to end users at lower Token consumption in office and content creation scenarios, thereby driving customer adoption and AI spending. Goldman Sachs' main points are as follows: System-level AI products covering models, Tokens, and AI Agents Management highlighted the company's system-level AI product portfolio, including "One Model system, One Token factory, and One Agent Harness," which, combined with the company's proprietary computing platform and AI models, helps customers achieve higher ROI through generative AI. Management also stated that the company's latest AI multimodal model is based on the NEO unified architecture, adopting an encoder-free design and MoT (Mixture of Transformation), enabling deeper integration of different content types such as text, audio, images, and video. Continuing to expand the computing platform and increasing focus on ROI The company continues to invest in its computing platform to capture strong customer demand for AI products. With proceeds from the April 2026 placement, SenseTime plans to expand the scale of its AI computing cluster powered by domestic AI chips and strengthen its domestic AI cloud technology stack. Management stated that the company continues to focus on the ROI of computing platform spending, improving returns by closely tracking customer demand, refining its product portfolioincluding AI Token initiatives and vertical applicationsand optimizing the SenseCore platform. Customer base continues to diversify Management stated that the company's product customer base continues to diversify, with expanded customer coverage and reduced concentration on any single customer. The company's products primarily target three types of customers: first, serving small businesses or developers through the AI Token initiative; second, serving customers in TMT, financial, consumer electronics, and other industries through AI total solutions; third, providing AI applications to professionals or enterprise customers, such as Seko for generative AI video and Raccoon for AI office scenarios, the latter using the company's proprietary AI model SenseNova 6.8-Flash-Lite. Valuation The report's appendix shows that Goldman Sachs estimates SenseTime's revenue for 2026 to 2028 at RMB 6,456.7 million, RMB 8,386.5 million, and RMB 9,407.7 million, respectively, with EBITDA of RMB -993.5 million, RMB 574.9 million, and RMB 1,256.8 million, respectively, and EPS of RMB 0.00, RMB 0.01, and RMB 0.01, respectively. The bank assigns a 12-month target price of HK$2.03 based on a two-stage DCF valuation, with a WACC of 11.5% and a perpetual growth rate of 2%.