JPMorgan has initiated coverage on MANYCORE TECH (00068) with a "Neutral" rating and a target price of HK$19. The report identifies the company as a leading provider of indoor design SaaS in China, with potential competitiveness in spatial intelligence or "world model" applications. However, the stock has risen 156% since its IPO, and its current valuation—approximately 26 times price-to-sales and about 180 times the expected 2027 price-to-earnings ratio—represents a significant premium compared to global design software leader Autodesk, which trades at 6 times price-to-sales and 17 times expected earnings. This suggests the market has already priced in a substantial portion of its potential AI value.
JPMorgan views MANYCORE TECH's traditional SaaS operations as high-quality assets. The company holds a 23% market share in China's indoor design software sector based on 2024 revenue. Subscription revenue is projected to account for 97% of total revenue in 2025, with a gross margin of 82% and an adjusted net profit margin of 7%. The bank forecasts an 11% compound annual growth rate for revenue from 2025 to 2028, with the adjusted net profit margin potentially expanding to 17% by 2028.
Nevertheless, the current stock premium indicates investors are valuing not just the SaaS business but also its AI advantages. The company aims to leverage its database of 480 million 3D models accumulated over 15 years to enter the spatial intelligence field. While the narrative around spatial intelligence is clear, this business segment remains in the early stages of commercialization. Estimated related revenue for 2025 is under $1 million, and the industry lacks public benchmarks. Acknowledging the difficulty in precisely valuing this segment, JPMorgan referenced valuations of similar early-stage projects in the market, such as AMI Labs and World Labs, to assign MANYCORE TECH a valuation of $4.2 billion, equivalent to HK$19 per share.
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