Yidu: Large Language Model Should Bolster Big Data Business, but Client Additions Still Uncertain

We are providing an update on no-moat Yidu after it rolled out a new large language model, or LLM, on its platform. This should bolster its artificial intelligence and Big Data services that could enable further clinical trials and improve hospital management. We are unsure if this will translate into an incremental number of clients immediately, but we believe that the model should enhance Yidu’s product portfolio as it competes to be China’s top healthcare Big Data platform. The company shared that its model, Yidu HH, can perform different functions that should help pharmaceutical clients speed up their clinical trials and its other hospital service businesses. For now, we maintain our fair value estimate at HKD 5.20 per share for Yidu until there are signs of significant adoption of the new model. The shares are currently trading in 4-star territory.