Shares of Shangtang-W (00020.HK) jumped higher today (31), last trading at 2.47 yuan, up 6.9%. Everbright Securities said in a report that Shangtang's revenue in the first half of this year reached 1.415 billion yuan (the same as below), a year-on-year drop of 14.3%, mainly due to the delay in the project progress of some enterprises and urban customers as a result of the epidemic, and the annual decline in revenue from smart cities and smart business sectors. In terms of profitability, gross profit margin fell 7% to 66% year-on-year in the first half, mainly due to an increase in hardware share due to customer demand. Due to the decline in gross profit and the annual increase in R & D expenses by 14.9%, the company's adjusted net loss expanded to 2.564 billion yuan from 703 million yuan in the first half of the year. The bank pointed out that the income of smart business and smart city sectors has been greatly affected by the epidemic, and revenue is expected to pick up sharply in the second half of this year. In the first half of this year, the revenue of smart business and smart sector was 568 million yuan, down 12.2% year-on-year, while that of smart city sector was 434 million yuan, down 44.8% year-on-year. The annual decline is mainly due to the delay in the delivery, deployment and construction progress of some enterprises and urban customers due to the epidemic, resulting in a delay in revenue recognition. During the period, the number of smart city customers added 15 cities; although the number of smart business customers decreased by 19% year-on-year, the revenue per customer increased by 9%. With the repair of the epidemic, business deployment and delivery are gradually restored; the demand for intelligence continues unabated, and customers and application scenarios continue to expand; the business is seasonal, and most projects are delivered in the fourth quarter. The bank expects smart business and smart city sector revenue to pick up sharply in the second half of the year. Everbright Securities refers to, taking into account Shangtang's continued investment in research and development, slightly raised the forecast net loss in 2022 to 4.585 billion yuan, with SenseCore infrastructure achieving economies of scale and improved operating leverage, the loss rate is expected to continue to narrow, reducing the net loss by 2023 and 2024 to 3.616 billion and 3.364 billion yuan respectively. The company maintains a leading position in the field of computer vision AI; commercial realization space, huge potential, with a certain target scarcity and premium space, maintain the "overweight" rating.