【TechWeb】On April 1, the application of UCCD Technology Co., Ltd. (hereinafter referred to as UCloud) for the initial public offering of shares and listing on the Science and Technology Innovation Board was officially accepted by the Shanghai Stock Exchange, and there is news in the industry that if the acceptance is successful, UCCD will become the first stock in the cloud computing industry.
According to the website of the Shanghai Stock Exchange, the number of companies that suspended the listing review of the Science and Technology Innovation Board in one day on July 30 has surged to 80, and UCloud is one of them.
According to the subsequent announcement issued by the Shanghai Stock Exchange, the main reason for the suspension of the review of these 80 sci-tech innovation board enterprises is that the validity period of their financial reports has expired.
According to statistics, of the first 25 companies listed, China Railway Communication and Signal Co., Ltd. took the shortest time to complete the listing, taking only 98 days. In addition to China Tong, there are three other companies that take less than 100 days to complete the listing, namely Hangke Technology, Western Superconductor and Jiayuan Technology.
Since the submission and acceptance, nearly 4 months of UCloud inquiry for more than a few months "without a word", has been stuck in the "inquired" state, because there has been no next result, UCloud's financial report data due to expiration was called to suspension, the road to listing has begun to wave.
Single source of revenue, financial growth slowed
The planned financing amount of 4.748 billion yuan is mainly used for multimedia platform projects, application data security circulation platform projects in network environments, new generation artificial intelligence service platform projects, and data center construction in Jining District, Wulanchabu City, Inner Mongolia.
According to the prospectus, UCloud is a domestic third-party cloud computing service provider, committed to creating a secure and reliable cloud computing service platform for customers, the company provides basic resources such as computing, networking, storage and other basic IT architecture products built on top of these basic resources, as well as big data, artificial intelligence and other products, through the public cloud, private cloud, hybrid cloud three models to provide services to users.
According to the IDC report, UCloud accounted for 4.8% of China's public cloud IaaS market in the first half of 2018, ranking sixth after Alibaba Cloud, Tencent Cloud, China Telecom, AWS, and Kingsoft Cloud.
From 2016 to 2018, the operating income corresponding to the core technology of UCDE was 243.7821 million yuan, 377.2334 million yuan and 518.4281 million yuan, respectively. During the same period, the company's operating income was 516.468 million yuan, 839.7997 million yuan and 1187.4332 million yuan, respectively. The proportion of revenue corresponding to the company's core technology to operating income was 47.2%, 44.92% and 43.66% respectively, which gradually declined.
In 2016, 2017 and 2018, the business income of the company's public cloud was 472.198 million yuan, 763.9946 million yuan and 1011.125 million yuan, contributing 91.43%, 90.97% and 85.15% of the operating income respectively.
A public cloud is a type of computer service provided by a computer service provider over the Internet that allows customers to pay based on CPU, storage, or broadband usage.
In the fourth round of inquiries, the SSE raised a total of five questions about UCTECH, on five aspects: shareholder capital contribution, long-term equity investment impairment provision, agency business with agent customers, quality of application documents and financial statements.
In response to the Shanghai Stock Exchange's question on "the special strategic significance of developing private cloud business for issuers", UCloud said that since the second half of 2015, more and more traditional enterprise customers have begun to accept and use cloud computing products and services, but traditional enterprises have higher requirements for data security, asset and device ownership, and technical controllability, so traditional enterprises will not deploy their core business on the public cloud in the short term, and they are more likely to accept deploying their core business in the private cloud.
Since a large number of traditional enterprise customers are the real mainstream users of cloud computing in the future, issuers hope to acquire more traditional enterprise customers, and private cloud services are a good entry point for expanding traditional enterprise customers. Therefore, since the second half of 2015, issuers have a strong willingness to quickly lay out the private cloud field and occupy the market opportunity.
TechWeb found that UCloud's revenue decline in the first quarter of 2019 was mainly caused by a sequential decline in private and hybrid cloud revenue. The sequential decline in private cloud and hybrid cloud revenue accounted for 59.26% and 27.50% of the month-on-month decline in operating income, respectively. It can be seen that the private cloud business that UCloud launched in 2015 has not achieved good results.
It is worth noting that in addition to the above risks, during the reporting period, the accounts receivable of UCTA gradually increased. As of the end of 2018, its accounts receivable were about 176 million yuan, about three times that of the end of 2016.
Although UCloud continues to expand private cloud, hybrid cloud and other businesses including big data and artificial intelligence, from the current point of view, the effect is average. "Safe House" is a representative product of UCloud, which can achieve secure sharing of data without changing data ownership. And security is almost the focus of all giant cloud computing vendors, and UCloud's products are not prominent.
Cloud services market competition in the shadow of fierce giants slow development
With the rapid development of the Internet, the domestic cloud computing market has also erupted with unprecedented strength, and the cloud computing service providers represented by BAT are accelerating their scale expansion, and resources and technologies are gradually migrating to the head enterprises.
According to IDC data, Alibaba Cloud ranked first with a share of more than 40% in the first half of 2018, with revenue of about 13.4 billion yuan in 2018, far ahead of competitors. In addition to Alibaba Cloud, Tencent Cloud has also been deeply engaged in the cloud computing industry for many years, the overall scale ranks after Alibaba Cloud, and then counting Baidu Cloud, the industrial resource advantages of the head enterprises are obvious, which meets the "cloud" needs of most small and medium-sized enterprises and seizes most of the customers in the cloud computing market.
It should be noted that these industry giants are also constantly lowering product prices, which greatly increases the competitive pressure of late entrants in the industry. The data shows that Alibaba Cloud has carried out four rounds of price reductions in 2018, and some core products have reduced prices by more than 40%.
In addition to BAT, the Internet industry also has Kingsoft's Kingsoft Launched Kingsoft, JD.com's JD Cloud, NetEase NetEase Cloud, etc.; the three major domestic operators also have cloud service platforms, HUAWEI CLOUD, Inspur Cloud, Tsinghua Unigroup Cloud and other traditional enterprise cloud service businesses have also developed rapidly; in addition, there are many IDC vendors involved in it, such as Huayun Data, 21Vianet, Capital Online and so on.
Because of the large number of participants, UCloud's current business development model, which mainly relies on public clouds, will face a variety of competitive pressures, and the future development is not optimistic.
In the cloud computing market with huge financial investment, UCloud wants to have no capital advantage over other industry giants, especially in the business field represented by the IaaS business, and its investment amount, long time, and long profit make UCloud face huge financial pressure. UCloud also said in the prospectus that the capital strength is relatively lacking, the single financing channel is one of the company's competitive disadvantages, and the current financial strength is still relatively weak compared with international and domestic listed companies. "Only by actively exploring a variety of financing channels can the company meet the capital needs of the company's business development, so as to achieve the expected goals of business development relatively quickly."
For domestic small and medium-sized cloud computing enterprises, on the one hand, it is necessary to maintain capital investment in technology, research and development, operation, etc., on the other hand, it is still under the pressure of the scale effect of large enterprises themselves, and the rapid development of the industry and fierce market competition. If UCloud's public cloud business cannot find the focus of development and form differentiated products, it is difficult to form competitive barriers before other businesses have formed a scale.
Source: TechWeb
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