As a vertical leader SaaS company in the financial industry, Bairong Yunchuang (BairongYun 6608. HK) achieved good results in 2021. Its latest financial report data shows that Bairong Yunchuang achieved revenue of 1.623 billion yuan and adjusted net profit of 141 million yuan in 2021, an increase of 43% and 76% year-on-year, respectively.
With the continuous advancement of global enterprise cloudification and digitalization, the SaaS track will continue to be one of the most noteworthy industrial directions in the global technology field in the future. As China's leading independent AI technology platform, Bairong Yunchuang is at the forefront of digital intelligence, not only becoming the digital intelligence partner who understands the pain points of financial institution business upgrading the most, but also its own growth advantages have also been proved.
In fiscal 2021, Bairong Cloud's first main business, intelligent analysis and operation service revenue, increased by 38% to 737 million yuan, the best performance in the past four years; the other two businesses also set a new record - benefiting from the improvement of the efficiency of helping financial institutions to open up high-frequency scenarios to enhance the conversion efficiency of stock marketing, the company's precision marketing service revenue increased by 60% year-on-year to 422 million yuan; insurance distribution service revenue increased by 37% year-on-year. To HK$464 million, life and health insurance premiums accounted for the vast majority, with an average policy term of more than 10 years and a renewal rate of over 95%.
The main data of Bairong Cloud's annual report confirms that it has maintained a benign expansion as a domestic specialized new independent AI technology platform, and its contribution to the "digital intelligence" transformation empowerment of financial institutions such as mainland banks complements the policy guidelines, and the value contained in the company's asset quality and growth is now in it.
Growth advantages are gradually emerging
With the continuous advancement of the national digital intelligence and cloud-based strategy, the domestic SaaS track is accelerating its outbreak. Taking Bairong Yunchuang as an example, guoyuan securities research report believes that the company is currently in a rapid growth stage.
Founded in 2014, Bairong Yunchuang is China's leading AI technology platform, successfully listed on the Main Board of Hong Kong in March 2021, and at present, Bairong Yunchuang's customer scope covers the vast majority of state-owned banks, more than 900 regional banks, most consumer companies and major insurance companies.
Guoyuan Securities research report suggests that Bairong Yunchuang benefited from the more mature business model of "payment for results" and "SaaS+Service", and the rising market recognition, and the company's market share in 2021 is expected to rise to 11%.
The combination of high-quality customers and SaaS model also makes Bairong Yunchuang have the advantage of payment collection management with shorter account periods. By the end of the reporting period, the company had served 5,700 financial institution customers in China, with more than 3,300 paid customers, an increase of 27.5% year-on-year; core customer ARPU increased by 24.8% year-on-year to 5.12 million yuan, core customer retention rate was as high as 91.6%, and core customer net income expansion rate was 118.1%.
At the beginning of this year, the China Banking and Insurance Regulatory Commission issued the Guiding Opinions on the Digital Transformation of the Banking and Insurance Industry, which clearly pointed out that the banking and insurance industry should focus on model algorithms, artificial intelligence and other fields in its future development; it emphasized "win-win ecological construction".
In recent years, the investment in technological upgrading in the banking industry has reached about 6 times the level of the insurance industry; iResearch expects that the investment in technological upgrading of the banking industry will reach the level of 310 billion yuan and 370 billion yuan in 2022 and 2023, respectively, maintaining the compound growth rate in recent years.
Based on this, compared with the general-purpose SaaS companies in the financial industry, SaaS companies in the banking sector are expected to share the spillover dividend and drive growth. To this end, Bairong Yunchuang has accelerated the promotion of the "digital intelligence" matrix of various departments of the group last year, forming a unified AI platform covering all lines of the company, which is a "compulsory course" for the company to consolidate long-term cooperation with customers and continuously define the industry's leading business model through innovation, and has become a necessary mechanism to enhance the cognition of customer needs at each node and accelerate the metabolism of scientific and technological productivity.
It is understood that the self-driving force of Bairong Yunchuang originates from the competitive concept of unifying the "gene" of start-up and unremitting innovation, integrates and applies the specialties of international AI technology giants and financial industry consulting providers, and contains profound insights and rich experience in the transformation of domestic banks and other financial institutions, and accumulates a huge customer base, the company has also "settled" in the list of many institutional bidding libraries, and the market penetration of binding services has kept rising.
Be an enabler of financial "digital intelligence" upgrades
Bairong Yunchuang has a deep technical accumulation in the field of digital and intelligent empowerment services in the domestic banking and insurance industry, and the bank's intelligent operation SaaS solution is its first main business, and Bairong Yunchuang has formed a rich insight into the "pain points" of the transformation of the mainland banking industry and has a long-term stable customer precipitation.
According to the latest data, as of the end of 2021, the total scale of mainland asset management business has reached 67.87 trillion yuan, an increase of 2 trillion yuan over 65.87 trillion yuan in the previous quarter, an increase of 3% month-on-month and a 15% increase over 2020, and the asset management market has maintained rapid growth.
The growth of the asset management market in the financial industry is expected to drive the rapid growth of the demand for fintech services, of which the SaaS demand in the financial industry is expected to be one of the most beneficial areas. According to IDC statistics, in the first half of 2021, the scale of the mainland financial cloud solution market reached 45% year-on-year, which is nearly 7 percentage points higher than the growth rate of the financial cloud infrastructure market. Financial SaaS applications will become an important part of the digital transformation of the mainland's financial industry in the future.
"Institutions and companies that are the first to complete digital and online transformation will usher in greater opportunities in the next decade." Zhang Shaofeng, CEO of Bairong Yunchuang, said that Bairong Yunchuang should become an enabler of the "digital intelligence" upgrade of the financial industry.
According to Zhang Shaofeng, Bairong Yunchuang will continue to implement the research and development strategy of machine learning, intelligent voice and privacy computing as the key research direction; in terms of services, it will continue to enrich the product ecology and accelerate the landing, meet the multi-level business upgrading needs of banks and other financial institutions from traditional business to wealth management, from basic scenarios to cross-scenario operations, from inclusive finance to deep industry-finance integration, improve the online technology productivity and conversion rate of customers in all formats, consolidate the foundation of long-term cooperation, expand resource sharing, and achieve win-win ecological construction. Practice the national top-level design requirements.
Practitioner of long-termism
There is a saying in the SaaS industry that delivery services are not the only criterion for measuring the level of companies in the industry, but the core competitiveness lies in the ability to provide professional advice to customers and work together for a long time.
According to the financial report, Bairong Yunchuang has 237 core financial service provider customers in 2020, and as of December 31, 2021, 217 of the above core customers are still paid financial service provider customers, with a retention rate of 91.6%.
Abundant funds and the outstanding achievement conversion rate of the R&D team have become the indispensable backing of Bairong Yunchuang's product innovation. It is understood that in recent years, Bairong Yunchuang has ranked first in terms of R&D in domestic TO B-type SaaS listed enterprises, with a total R&D investment of 252 million yuan last year, accounting for 16% of revenue.
Bairong Yunchuang's research and development is mainly concentrated in vertical areas of technological innovation, including machine learning, AI voice and privacy computing, etc., the company is the first company in the industry to obtain ISO/IEC 27701 standard certification, in 2021, the independently developed Indra privacy platform passed the "Federal Learning Basic Ability Special Evaluation" of the Academy of Information and Communications Technology, marking that the company has completed the expansion of the privacy management system and proved its strength in information protection and privacy compliance.
In the "harvest period" of 2021, Bairong Yunchuang won 5 national invention patents in the above fields in one fell swoop, and now has more than 150 soft works and patents. The number of national invention patent authorizations ranks among the best in domestic banks, insurance technology vertical A-shares and Hong Kong stock companies, and the company plans to expand its technical advantages in the field of machine learning in 2022, coordinate research and development, optimize the application of orCA, an automatic learning platform for financial scenarios, improve customer ROI and other business objectives, and strengthen the company's competitive barriers.
The commercial progress of different R&D achievements is closely related to the business development cycle. According to Bairong Yunchuang's reading of the industry prospects, combined with the technical reserves and customer advantages and other factors, the company expands the enabling territory of intelligent analysis and operation and precision marketing to wealth management and scenario finance.
CICC also believes that Bairong Yunchuang has sufficient working capital, and through acquisitions, it will help the company enrich the product ecology, improve the retention rate of core customers, and improve ARPU; strengthening the development of neural networks, privacy computing and other technologies will help enhance the company's core competitiveness.
From the financial report data, it is not difficult to find that Bairong Yunchuang's strong "hematopoietic" ability is in the leading position in the SaaS sector, and the advantages of capital safety cushion are outstanding. During the reporting period, the net cash flow from operating activities of Bairong Yunchuang rose to RMB265 million, an increase of 27% year-on-year, and the total cash equivalents and financial assets reached RMB3.95 billion. By the end of the reporting period, the company's shareholder structure remained stable, and China Guoxin, CICC, Hillhouse, etc. still accounted for the top ten shareholders, and the value of the company's asset quality and growth is now in it.
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