IPO analysis | Glenn Deep Pupil: A breakout surrounded by ai four small dragons The profit dilemma still needs to be solved

"Science and Technology Innovation Board Daily" (Shanghai, reporter Huang Xinyi) On March 7, Geling Deep Pupil officially launched the subscription, with an issue price of 39.49 yuan / share, and the online subscription code was 787207. According to the issue price and the number of new shares issued, it is expected to raise 1 billion yuan, and after deducting the issuance fee, it is expected that the net amount of funds raised will be about 1.67 billion yuan, which is 670 million yuan more than the original plan.

Like the AI Four Dragons, Geling Deep Pupil focuses on the field of computer vision, and after experiencing many trials and errors in retail, transportation, finance and other application scenarios, it has only gone through the business model in the urban management field related to the security scene, but it is also facing the same profit dilemma as other AI companies.

Zhao Yong, chairman and general manager of Geling Deep Pupil, told the "Science and Technology Innovation Board Daily" reporter during the online roadshow: The main problem facing the AI industry at present is that the landing scenario is relatively single, concentrated in the field of urban management, and the competition is relatively fierce, and the company has been exploring the application of AI downstream multi-scenarios. At present, the proportion of income in the field of urban management is decreasing year by year. In the future, we will continue to develop and innovate mainly in the above new application scenarios.

In addition to the AI Four Little Dragons, the comparable companies in the industry include Danghong Technology, Rainbow Soft Technology and other listed companies on the Science and Technology Innovation Board, and there is a certain gap in the scale of revenue.

How to break through from the RED Sea of AI Security?

From the rise of deep learning in 2012, which ignited the spark of the AI wave, to the success of AlphaGo in 2016, the east wind of the AI industry was blown. In those years, many AI startups have been established, with a high-tech halo on their heads, attracting a large influx of capital. Glenn Deep Pupil is also one of them.

Zhao Yong, one of the founders of Geering Deep Pupil, was a senior researcher at Google Headquarters Research Institute and was the earliest core R&D member of Google Glass. Therefore, from 2013 to 2014, which was just established, Geling Deep Pupil attracted investment from well-known institutions such as Sequoia China, Ceyuan Venture Capital, and Zhen Fund. Today, these early investors are still among the top shareholders of The Deep Pupil of Glen.

Among them, Sequoia Capital holds 19.4 million shares, with a shareholding ratio of 13.99%, ranking the second largest shareholder. Ceyuan Venture Capital and Zhen Fund I are the third and fourth largest shareholders, holding 13.85 million shares and 11.08 million shares respectively, with a shareholding ratio of 9.99% and 7.99%. Coupled with the Zhen Fund IV. that was later invested, the overall shareholding ratio of the Zhen Fund reached 8.43%.

An industry insider told reporters that the development dilemma of pure AI companies is that although they have advanced technology, they do not know where to land. This is also known as "holding a hammer to find a nail", that is, using AI technology to find application scenarios.

This is especially evident in Glen's deep pupils. After experiencing the obstruction of retail, transportation, finance and other fields in the early days of its establishment, Geling Deep Pupil still found a breakthrough in the urban management security of the four small dragons of AI.

In the words of a former AI Four Dragons employee, "Geling Deep Pupil is also a successful transformation." ”

According to the prospectus, the revenue of Geling Deep Pupil mainly comes from the three major areas of urban management, smart finance and commercial retail. Among them, urban management in 2018-2020 and January-June 2021, accounting for 79.30%, 51.73%, 51.50%, 66.17% of the company's main source of revenue.

In China, the field of urban management and governance related to security is the earliest commercial landing track of AI, and it is still one of the main tracks with the largest capacity of ai landing market, but due to the large number of competitors, it has become a red sea.

As Zhao Yong said: The main problem facing the AI industry at present is that the landing scenario is relatively single, concentrated in the field of urban management, and the competition is relatively fierce.

In addition to the competition from AI companies, Geling Deep Pupil is also facing market pressure from leading enterprises and large equipment suppliers in traditional industries. Hardware leading enterprises such as Hikvision and Dahua Co., Ltd., and large ICT comprehensive manufacturers represented by Huawei have also joined the competition.

According to the IDC report, the computer vision market size in 2020 is $1.66 billion. Among them, SenseTime, Megvii, Hikvision, Yuncong Technology and Yitu Technology ranked in the top five, and Dahua Technology ranked eighth. The Deep Pupil of Glen is classified among others.

The proportion of AI hardware revenue continues to grow

Zhao Yong believes that compared with other AI companies, the company's advantages in technology are mainly reflected in the three-dimensional stereo vision technology.

According to reports, Zhao Yong himself, as an expert in the field of three-dimensional visual technology, has developed related products such as Haomu behavior analyzer based on this technology, and has been applied in the fields of smart finance, rail traffic operation and maintenance, sports and health.

From the perspective of the prospectus, AI soft and hardware integration products, including Haomu behavior analyzer, edge computing equipment, deep pupil vision camera, face recognition device and dual-light temperature measurement intelligent identification device, have gradually become the core revenue source of Geling Deep Pupil. Its revenue accounted for 69.71% from 17.65% in 2018.

In fact, this is also the commercialization direction that many AI companies are expanding. When Yuncong Technology replied to the inquiry, it was frank that in the current artificial intelligence market environment, downstream customers tend to purchase hardware or software and hardware integrated products. Some brokerage analysts also pointed out that from the perspective of commercialization, compared with pure AI services, the end-to-end solution of software and hardware integration is more popular in the market.

Make efforts to develop new areas such as smart finance and rail transportation operation and maintenance

In recent years, Glen Deep Pupil has actively expanded into smart finance, commercial retail, rail transit operation and maintenance, sports and health and other fields. In 2021, the company expects operating income to be about 270 million to 310 million, and the revenue growth is mainly from the smart finance sector.

According to the prospectus, in March 2021, the company was shortlisted for the Agricultural Bank of China's 2020 security equipment project, and the sales revenue grew rapidly, and it is expected to exceed 100 million yuan, which is the main source of revenue growth in the financial sector. In 2021, the net profit after deduction of non-attributable to the mother is expected to be about -8,000 to -65 million yuan, and the loss is narrower than that of the previous year.

It is worth mentioning that from 2018 to 2020, the net cash flow from operating activities of Geling Deep Pupil was -110 million yuan, -110 million yuan and 35.08 million yuan, respectively. The company successfully achieved the transformation of operating cash flow from negative to positive in 2020, and if the commercialization of new fields is successful, there may be a possibility of turning losses into profits in the future.

Sports and health, rail transportation operation and maintenance, as the two major innovation areas of the key layout of Geling Deep Pupil, are also the research and development projects that the funds raised are the key investment projects.

Among them, the rail transit operation and maintenance solution supports the fault diagnosis tasks of a variety of trains, high-speed rail and subway models, covering more than 30 kinds of fault detection and more than 15,000 checkpoints, has established partnerships with CRRC Electric, and started pilot projects in Ningbo, Wuxi and other subway operation and maintenance projects.

Sports and health solutions are mainly used in campus physical education, fitness guidance, and rehabilitation assessment scenarios. Through the capture and analysis of human body movements, and the comparison of similarity and standard degree with the movements of professional athletes, it provides personalized, scientific and systematic fitness suggestions and rehabilitation guidance for sports training. At present, it has established a long-term cooperative relationship with the Capital Institute of Physical Education. The company's founder, Zhao Yong, has been the chief scientist of the Artificial Intelligence Research Institute of the Capital Institute of Physical Education since 2019.

With the continuous development of the artificial intelligence industry, AI has gradually faded the aura of "black technology". For AI companies such as Geling Deep Pupil, how to deeply integrate with more industries, build application solutions for different scenarios, and make technology cash in the industry and truly bring value is the key to winning the future.