iFLYTEK Liu Qingfeng's internal speech: Strive with hope on a more solid foundation

On January 18, Liu Qingfeng, chairman of iFLYTEK, delivered a keynote speech at the internal annual meeting, and "finally arrived in 2023" was his first sentence on stage.

Unlike Internet companies, iFLYTEK's "year-end summary" is generally held two days before the start of the Spring Festival holiday. On this day, the president of the company will report to all employees, and the chairman will give a speech on strategy. iFLYTEK's important strategy in the era of artificial intelligence 2.0 - "local business and systematic innovation" was first released to the public, and it was also at the company's annual meeting.

In his speech at this year's annual meeting, Liu Qingfeng talked about many topics such as base business, iFLYTEK Super Brain 2030 plan, and high-quality development. He said that although it will not be easy for everyone in 2022, relying on the growth of the base business, iFLYTEK has consolidated the foundation in 2022 and continued to solidly promote the iFLYTEK Super Brain 2030 plan, "Relying on the base and systematic innovation, iFLYTEK will open a new stage of high-quality development in 2023." ”

Stabilize the situation and continue to grow benignly in the local business

The latest data showed that China's manufacturing purchasing managers' index (PMI) fell 1.0 percentage points from the previous month to 47.0% in December, falling for three consecutive months and hitting a new low since March 2020, indicating that the economy is in contraction territory. According to data from the National Development and Reform Commission, the youth unemployment rate reached 17.1% in November 2022, and Chinese technology Internet companies seem to have tacitly released adjustment signals together, emphasizing that they should reduce costs and increase efficiency in the new year, and pay more attention to stable operation.

iFLYTEK's business also suffered multiple rounds of impact in 2022, with more than 10 projects in the education business being extended in the third quarter alone, involving a contract value of 1.6 billion. iFLYTEK's revenue is generally seasonal, with revenue accounting for a relatively large proportion in the fourth quarter, taking 2021 as an example, accounting for more than 40% of revenue in the fourth quarter.

However, in the fourth quarter of 2022, with the dynamic changes of the epidemic, the optimization and adjustment of prevention and control strategies, and the echelons of various provinces entered the peak period of the epidemic epidemic, "December was originally a valuable sprint period, but it almost stopped", Liu Qingfeng said frankly.

Under such difficult circumstances, iFLYTEK's base business still recorded a year-on-year revenue growth of 13% in the fourth quarter and a 23% growth for the full year. Liu Qingfeng revealed at the annual meeting that the progress made in the local business has stabilized the situation in 2022, and the basic situation has been further consolidated.

iFLYTEK defines businesses with long-term operating capabilities, sustainable growth potential, high user dependence and industry demonstration value as local businesses. The core of the local business is "meeting the rigid needs of society and promoting social progress with value creation", which is directly manifested in helping iFLYTEK obtain long-term stable growth in revenue and enable it to cross the economic cycle.

For example, in terms of education base business, Liu Qingfeng said at the annual meeting that the examination business, learning machine business and personalized learning manual business will grow accordingly in 2022.

In terms of medical base business, iFLYTEK Intelligent Medical Assistant business area covers 380 counties in 2022, the number of AI assistance times is as high as 530 million, the number of revised diagnoses will reach 630,000, and the gross profit of intelligent medical assistant contract will increase by more than 110% in 2022, and it is expected to maintain a rapid growth of more than 80% in 2023.

"The local business is to cope with the uncertainty of global economic development, it can cross the economic cycle, do what is just needed, no matter how the economy changes and how the society changes, it must be used." Liu Qingfeng said that in the next five years, the annual operating income of the base can reach 50 billion yuan, and the gross profit will be 20 billion yuan, which will become the basic development of the company.

The Superbrain 2030 plan is steadily advancing

At the 2021 annual meeting, iFLYTEK released the future-oriented "iFLYTEK Super Brain 2030 Plan", and used this as a traction to promote systematic innovation in source technology, so that artificial intelligence can "understand knowledge, learn well, and evolve", and finally let robots enter every home.

At the annual meeting, Liu Qingfeng introduced that iFLYTEK's key technologies such as speech recognition, speech synthesis, graphic recognition, and cognitive intelligence will continue to make breakthroughs in 2022, and the new breakthrough of dialogue system will bring new commercialization opportunities, which will take the lead in automotive, medical, education and other industries, such as automotive human-computer interaction, AI consultation, virtual teachers, etc.

For example, the company's multi-style and multi-emotion speech synthesis system SMART-TTS has greatly improved the speech synthesis experience, the system has rich timbre styles, supports 10+ scenes, 11 emotions, and 40 levels of strength and weakness adjustment.

Liu Qingfeng said that graphic recognition continues to maintain the generational difference advantage, the complex formula recognition rate has achieved a significant leading position in the industry, and the original organic chemical recognition scheme has broken through the available threshold for the first time in the industry, "Last year, mathematician Chengtong Yau came to iFLYTEK, saw that very complex formulas can be recognized, very excited, felt that it brought great convenience to mathematicians, and he also hoped that we would use robots to translate Euler's Latin papers into English and Chinese, and show great works to it." ”

Liu Qingfeng continued to point out that machine comprehension ability has evolved from reading comprehension to knowledge reasoning, making new breakthroughs, and the company has successively won the championship in the knowledge reasoning reading comprehension evaluation competitions OpenBook QA and QASC, exceeding the human average, and at the same time refreshing the world's best results in the logical reasoning reading comprehension competition ReClor.

"Athletic intelligence has achieved what everyone agrees to be the best level of athletic ability." Liu Qingfeng pointed out that from 0-1 sports intelligence core technology made a great breakthrough last year, so iFLYTEK dared to release the robot superbrain platform AIBOT, as of the end of December, 205 developer teams have intervened, the large number of development team intervention allows the company to have a large amount of motion process data for training, the system will go to a new level in the future.

In 2023, high-quality development

Relying on local business and systematic innovation, iFLYTEK will open a new stage of high-quality development in 2023.

For the high-quality development of iFLYTEK, Liu Qingfeng mainly focuses on four dimensions: profit, cash flow, per capita efficiency, and sustainability.

In the new stage of high-quality development, iFLYTEK aims to increase profits by more than 30% per year, and cash flow matches profits and synchronous healthy growth. In addition, the per capita benefit doubled in three years, while the operating base area and continuous flow business accounted for more than 80% within five years.

The management change corresponding to this stage of development is to shift from scale priority to benefit priority in organizational assessment, upgrade the efficiency index of per capita gross profit and fee gross ratio improvement to profit index, and increase the weight, which is used as a key monitoring indicator in the process.

The key to achieving high-quality development is talent, and the appreciation of talents is the most important appreciation of the company and the most valuable asset of the company. Liu Qingfeng said that iFLYTEK ensures the appreciation of talents by enriching the types of echelons, accelerating the development of high potential, continuously attracting outstanding talents recruited by the university, strengthening the construction of the cadre team, and maintaining the vitality of cadres.

While ensuring profits, Liu Qingfeng also emphasized that "if there is a major strategic opportunity, we will unswervingly do our best to invest, and iFLYTEK has a bigger dream in our hearts".

Speaking about iFLYTEK's goal in the era of artificial intelligence 2.0, Liu Qingfeng said, "We will unswervingly achieve the goal of 100 billion revenue, but we will face the new domestic and international political and economic situation, and achieve it on a more solid basis, higher quality and more calmly." ”

As of the close of trading on January 17, 2023, iFLYTEK's market capitalization increased by 59 times compared with the time of listing, with the Shenzhen Component Index falling by 10% and the Shanghai Composite Index falling by 11% during the same period. Regarding the current market value of iFLYTEK, Liu Qingfeng said that he is "not worried at all", and said that the key issue of the company's development is to return to the fundamental value creation, and the company's value will be recognized by more and more long-term investors.