Who Is The "First Share" Of The Four AI Dragons That Have Been "Inquired" By Yuncong Technology Innovation Board IPO Audit?

On the last working day before the New Year's Day holiday in 2021, Cloud updated its IPO review status from the science and technology innovation board to "inquired", marking that its listing process has entered the substantive review stage.

Yuncong, Yitu, Kuangshi and Shangtang are known as the "four little dragons" of computer vision in the domestic AI field. Who will be the "first share of AI" has always been one of the hot spots of the market.

Among them, Broadview Technology was the first to launch the IPO of Hong Kong shares but has been stranded since then; The IPO of Yitu Science and Technology Innovation Board was launched earlier than the cloud, and no new progress has been made since the "inquired" status was displayed on December 1, 2020; The IPO plan of Shangtang Technology has been reported from time to time, but has not yet been officially announced.

According to the current progress, the biggest competition of "AI First Share" will be between Yuncong and Yitu, and the comparison of their prospectus will become a big point. Some insiders believe that the cloud has gone smoothly from IPO, and it is possible to take the lead in landing.

It is noteworthy that AI technology has shown amazing power under the epidemic situation, which makes the market full of expectations for its future. However, in the capital market, the AI industry has been regarded as "more thunder than rain" in recent years. In this context, Yuncong and the market have also paid great attention to its valuation as it sprinted to the scientific innovation board according to the map.

Unicorn that burns money

When it comes to the domestic AI Four Dragons, "burning money" is the first impression that emerges in the minds of many investors.

With the disclosure of the prospectus by Kuangshi, Yitu and Yuncong, the market finally has an intuitive perspective to focus on AI Unicorn.

In August 2019, Kuangshi launched the first shot of AI Unicorn's listing and officially submitted a prospectus to the Hong Kong Stock Exchange.

Among them, Kuangshi Technology has the largest volume.

According to the prospectus, from 2016 to the first half of 2019, Kuangshi Technology achieved revenue of 67.8 million yuan, 313 million yuan, 1.427 billion yuan and 949 million yuan respectively. In terms of net profit, the loss of Blindsight Technology has expanded. During the same period, the net profit has lost 343 million yuan, 759 million yuan, 3351 million yuan and 5.2 billion yuan respectively.

The loss of Yitu Technology is also increasing year by year. In the first half of 2017-2020, the operating revenue of Yitu Technology was 68.7189 million yuan, 304 million yuan, 717 million yuan and 381 million yuan respectively; In the same period, the net profits of Yitu Technology were 1.166 billion yuan, 1.161 billion yuan, -3.642 billion yuan and -12.99 billion yuan respectively, with a total loss of 7.268 billion yuan.

In contrast, Yuncong's losses are much better, with its revenue scale slightly larger than that of Yitu, but its net profit loss scale is smaller than that of Yitu. From 2017 to the first half of 2020, Cloud has realized revenue of 64 million yuan, 484 million yuan, 807 million yuan and 220 million yuan respectively, and net profit losses of 106 million yuan, 180 million yuan, 1.708 billion yuan and 286 million yuan respectively.

According to the explanations of the three companies, the reasons for the expansion of losses year by year are the same. On the one hand, due to the rise of the overall valuation level of the AI industry, the fair value of the company's preferred shares rose accordingly, leading to book losses; On the other hand, it is continuous R&D investment.

It is worth noting that the investment institutions standing behind the three companies are very eye-catching. The largest shareholder of Kuangshi is Alibaba, as well as well-known shareholders such as Guoxin Holdings, Hon Hai Precision, Sunshine Insurance, Lenovo Venture Capital and BOC Group. The well-known shareholders of Yitu Technology include Sequoia Capital, Hillhouse Capital, Yunfeng Fund, Zhenge Fund, etc.

The number of shareholders of Yuncong Technology is up to 57, including many state-owned shareholders, such as Nansha Financial Holding, Guoxin Capital, Shanghai Liansheng, Guangdong Venture Capital, etc. Zhou Xi, the founder and CEO of Yuncong, is from Chongqing Research Institute of the Chinese Academy of Sciences. Yuncong's predecessor was also incubated by the face recognition research team of the Chinese Academy of Sciences. The Chinese Academy of Sciences is also one of the shareholders of Yuncong, which makes Yuncong technology known as the "AI national team".

Jiadu Technology, an A-share listed company, holds 7.82% of the shares of Yuncong Technology. The former also focuses on face recognition technology, invested in Yuncong Technology as early as April 2015, and again participated in the round B financing of Yuncong Technology in November 2017. The relevant person in charge of Jiadu Science and Technology Capital Operation Center told the 21st Century Business Herald reporter, "At the beginning, we sought partners in computer vision from the technology based on business needs. When we met Dr. Zhou Xi, we recognized his technology, business judgment, business philosophy and other aspects very much, so we invested 50 million yuan to him to establish Yuncong Technology. So our investment in cloud is based on our strategy in the general direction of AI. "

With the IPO of Kuangshi being stranded, "AI first share" may be generated from both Yuncong and Yitu. The IPO application of Yitu for the Science and Technology Innovation Board was accepted on November 4, 2020, and displayed as "inquired" on December 1. However, a month has passed, and the reply letter of Yitu has not been released. Yuncong's IPO application for the Science and Technology Innovation Board was accepted on December 3, 2020, and displayed as "inquired" on December 31. If successful, the cloud may be the first to land from the IPO.

On the listing process of Yuncong Technology, on January 4, the reporter of 21st Century Business Herald called the company's Board Secretary Office to ask about the relevant situation. After recording the reporter's questions, the staff said they would convey them to the relevant leaders. As of press release, no reply has been received.

AI tuyere and foam

Listing is not the end point. The unicorns mentioned above are still facing competition in technology and commercialization, and will also truly accept the test of the public. How to digest the existing valuation bubble is a big pressure.

According to the Hurun Global Unicorn List 2020 released by Hurun Research Institute, Kuangshi Technology has the highest valuation of 30 billion yuan, Yuncong Technology has a valuation of 20 billion yuan, and Yitu Technology has a valuation of 14 billion yuan.

From the above performance data, an obvious feature is that the net profits of the three AI unicorns continue to suffer losses and their valuations continue to rise. In recent years, the market has frequently mentioned the word "AI bubble" under the high valuation. However, Kuangshi Technology's plan to list in Hong Kong has run aground, which seems to be a note of the term.

Hu Guoping, senior vice president of iFLYTEK and president of the research institute, said in an exclusive interview with our reporter, "In the second half of 2019, it has become difficult for AI enterprises to refinance. When AI is hot, there are many companies in the second and third echelons, but it is unlikely that so many companies will do face recognition and medical imaging at the same time. But for the head companies, it has not reached the level of bubble. "

Yao Zhiqiang, co-founder of Yuncong Technology, also said publicly that "the bubble in the AI industry is normal"

"The whole AI industry is not making money, and has been developing in a loss state. IPO indicates that the enterprise is still short of money, and the gap is not small. The way that enterprises could have raised funds through venture capital has become impassable, and they can only rely on the stock market to meet their growing capital needs. " Zhang Xiaorong, president of Deep Science and Technology Research Institute and former senior vice president and chief internet analyst of a securities firm, told reporters.

Perhaps it is against this background that AI Company focuses on the capital market. From the perspective of fund raising scale, Yuncong's fund demand is lower than that of Yitu. The former plans to raise 3.75 billion yuan on the science and technology innovation board, while the latter raises 7.505 billion yuan.

As for the valuation of AI Unicorn after its listing, many market people interviewed believed that the decisive factor was technological innovation, including its own business, technical barriers, market barriers, and even the shareholder structure.

"There is no consensus on the valuation of AI. Ultimately, it depends on several factors such as the market, policies and company performance. The challenges faced by these enterprises in the future mainly lie in the research and development of innovative technologies, followed by the application of new technologies, and again, to shorten the time for commercial development as soon as possible and make profits as soon as possible." Zhang Xiaorong said.

In contrast, what are the technical advantages of Cloud? Zhang Xiaorong believes that "at present, the technical gap between the four dragons is not big. They are all making money from the financial and security fields based on face recognition technology. The competitive advantage is not obvious. The main difference lies in the application fields of products and solutions. For example, Yuncong focuses more on banks and on various medical fields according to the picture."