(Report producer/author: China Merchants Securities, Liu Yuping, Lin Yuxiao)
1. iFLYTEK: Empowering vertical fields with AI core technologies
1. iFLYTEK: "platform + track" strategy to build AI business
National backbone software enterprise, focusing on technical research in the field of artificial intelligence. iFLYTEK was founded in 1999 and went public in May 2008. The company has undertaken the construction of national key platforms such as the National Intelligent Voice High-tech Industrialization Base, the National Engineering Laboratory of Speech and Language Information Processing, and the National Artificial Intelligence Open Innovation Platform for Intelligent Speech, and has focused on technical research in the field of artificial intelligence such as intelligent language, natural language understanding, machine learning reasoning and independent learning for many years. The "platform + track" strategy builds the AI industry. iFLYTEK adheres to the artificial intelligence strategy of "platform + track", and relies on the artificial intelligence platform - iFLYTEK Open Platform, which takes intelligent voice and human-computer interaction as the core, to provide developers with one-stop artificial intelligence solutions. By the end of 2022, iFLYTEK Open Platform has opened 559 AI capabilities and scenario solutions, gathered 3.981 million developer teams, reached a total of 1.646 million applications, and linked more than 5 million ecological partners. In the application of "track", the company pays attention to the industrial application and application scale of technology, and launches intelligent products and services covering multiple industries, which have been deeply applied in the fields of consumers, smart education, smart city, smart car, smart medical, smart finance, and operators.
2. Equity structure: The equity structure is scattered, and the founder is the actual controller
The company's shareholding structure is relatively dispersed, and the founder Liu Qingfeng is the actual controller. As of the first quarter of 2023, the company's top ten shareholders held 36.03%, of which China Mobile, the company's strategic investor, held 10.66%, making it the largest shareholder. Chairman and founder Liu Qingfeng holds 7.24% of the shares, and has become the actual controller of the company because of the signing of the "Concerted Action Agreement" with China University of Science and Technology Asset Management Co., Ltd., and has the actual control of Anhui Yanzhi Technology Co., Ltd. Zhang Wei and other 5 natural persons hold a total of 7.01% of the shares, and none of them hold more than 2.6%. The relatively decentralized shareholding structure effectively reduces the company's liquidity risk, and the actual controller status of the founder is conducive to the company's long-term and stable development rhythm.
3. Business structure: With AI technology as the cornerstone, the products span seven major fields
With AI technology as the cornerstone, the product spans seven major areas. iFLYTEK uses artificial intelligence technology as the cornerstone to derive products and solutions across education, healthcare, government affairs, consumer business, carriers, automobiles, finance and other fields. The company focuses on expanding "base business", that is, operational businesses with sustainable user stickiness and revenue growth potential, including exams, learning machines, personalized learning manuals, intelligent medical assistants, medical insurance fee control, smart cars, smart hardware, etc.
(1) Smart education: GBC three-terminal linkage, mainly based on stable growth
GBC's three-end linkage responds to policy needs and is expected to achieve rapid revenue growth in the future. In the field of education, the company has built a business system for three types of customers: G/B/C, of which the G-end business is mainly based on the construction of cities, counties and districts, covering the overall solution for teaching various schools and users in the region; The B-end business is mainly based on school construction, including school-oriented smart classrooms, big data precision teaching, English listening and speaking classes, etc. The C-end business is mainly purchased by parent user groups, including AI learning machines, personalized learning manuals and other products. In recent years, based on the policy background of "double reduction," the new education reform, and the "14th Five-Year Plan" national informatization plan, the state has put forward higher requirements for the reduction and efficiency of education and the level of education informatization infrastructure construction. The three-end linkage of GBC effectively responds to the policy needs, and solves the problems of "teaching according to aptitude", reducing the burden and increasing the efficiency of teaching, personalized homework and learning and teaching informatization for education authorities, schools, teachers, parents and students, and promotes the rapid growth of revenue in the field of education.
G-end "teaching according to aptitude" continues to be promoted and applied, and B-end school construction is linked to respond to G-end needs. The G-side and B-side mainly cover the teaching and examination work of the school scene, and the G-end is larger than the B-side solution. By the end of 2022, the company's comprehensive solution for smart education has been applied at the city, district (county) level. Operational base business such as examinations still has good growth under the influence of the epidemic, and in 2022, the education examination business will add 12 new provincial and municipal high school entrance examinations and 2 provincial and municipal college entrance examinations; The intelligent marking technology has been officially delivered and applied in the college entrance examination of 14 provinces and cities; The English Listening and Speaking College Entrance Examination has added 12 prefectures and cities to the college entrance examination, covering 15 provinces and cities and 99 prefectures and cities. On the basis of the existing business development, iFLYTEK's examination business is expected to achieve higher profits in the future. In the smart classroom scenario, iFLYTEK realizes "visual diagnosis and analysis of learning situation, intelligent recommendation of lesson preparation resources, dynamic regulation of teaching process, and personalized planning of after-school learning". Facing the needs of "double reduction", the smart operation solution provides high-quality operation library construction, layered personalized homework arrangement, intelligent assisted correction, as well as intelligent scanners, dot matrix pens, flatbeds and other data collection equipment to realize the data collection of learning conditions and the accurate teaching of big data, and help schools reduce the amount of homework, improve quality and efficiency.
The value of C-end products is continuously verified, and multiple sales channels are jointly empowered. iFLYTEK's AI learning machine uses artificial intelligence to help students learn independently, reduce burden and increase efficiency, and has continued to be recognized by users and the industry since its listing in 2019, and has maintained the first NPS (word-of-mouth) ranking in the industry for many consecutive years. In 2022, the revenue of the company's AI learning machine business increased by 53% year-on-year, and online and offline channels were jointly empowered. In 2022, iFLYTEK's AI learning machine sales increased by more than 50%, ranking first in the cumulative GMV of online omni-channel full-cycle (Tmall & JD.com & Douyin) during the 618 promotion period, and achieving 100% growth in online sales during Double 11. In 2022, the number of offline stores of AI learning machines increased from 826 to 1,595, and the revenue of offline stores increased by 106%. The C-end personalized learning manual outputs value through B-end school scenarios, comprehensively upgrades around the "double reduction" and the new college entrance examination policy, and extends to the secondary vocational education market, targeting vocational education college entrance examination users and forming application demonstrations in some provinces and cities. In 2022, revenue increased by 12% year-on-year, thanks to the maintenance of the renewal rate and the improvement of single-school output, even as students were unable to print materials offline during the pandemic. In 2022, the school/student renewal rate of the Personalized Learning Handbook increased from 89% to 91%, and the output per school increased by 16%, covering 300 new schools.
Neutral estimates: iFLYTEK's education business G/B/C three-end revenue space can reach tens of billions of yuan per year. We measure the total space of iFLYTEK's education business by funding source. In terms of G and B ends, the funds mainly come from the government's education informatization funds, and it is estimated that the national education informatization expenditure is about 387.3 billion yuan / year, if iFLYTEK's market share exceeds 3%, the income space can exceed 10 billion yuan / year. On the C-end, the funds mainly come from students and parents, the total revenue space of the neutral measurement personalized learning manual and after-school service platform can reach about 27 billion yuan / year, the learning machine market, without considering the price increase brought by AI, the neutral estimated revenue space can reach about 13 billion yuan, if AIGC capabilities empower learning machine products to increase customer unit price, the learning machine business revenue space can be increased by billions of yuan.
G-end & B-end: This part of the downstream customers are the government and schools, and the funds mainly come from the government education informatization funds. In 2022, China's GDP will be 1210207 billion yuan, and the proportion of national financial education funds to GDP will remain above 4%, then the national financial education expenditure in 2022 will exceed 4.8408 billion yuan. According to the policy of the "Ten-Year Development Plan for Education Informatization (2011-2020)" issued by the Ministry of Education in 2011, governments at all levels should allocate education informatization funds at a proportion of not less than 8% of education funds to ensure that education informatization has continuous and stable government financial investment, and estimate the education informatization investment in 2022 with 8%, then the national education informatization expenditure in 2022 will be about 387.3 billion yuan, if iFLYTEK's market share exceeds 3%, the income space can exceed 10 billion yuan per year.
C-end: Measure the market space of three major products: AI learning machine, personalized learning manual, and after-school service platform. The AI learning machine is directly for C-end users, and although the personalized learning manual and after-school service platform are used in school scenarios, the direct paying customers are C-end students and parents, so it is counted as C-end product measurement.
Personalized Learning Manual: The main target high school group, according to iFLYTEK's 2022 Smart Education New Product Launch, the personalized learning manual has been applied in more than 3,000 high schools across the country, covering 4 million+ students. According to the Extreme Business Review, the personalized learning manual charges 200-500 yuan per year per subject, and each student orders an average of 2.5 subjects. In 2022, the total number of students in ordinary high schools nationwide will be 27.14 million, and the total market space of personalized learning manuals will be 20.355 billion yuan based on an average number of 2.5 subjects ordered and an average price of 300 yuan per semester. If the average number of subjects ordered per student can be increased to 3.5 in the future, and the long-term penetration rate of iFLYTEK's personalized learning manual reaches 20%, the revenue space of the personalized learning manual will be 11.4 billion yuan per year.
AI Learning Machine: The main target K12 group, according to the minutes of iFLYTEK's investor relations activities, the penetration rate of learning machines among K12 students nationwide in 2020 was only 2.4%. In 2022, the total number of students in primary schools, junior high schools and ordinary high schools in the country will be 185 million, assuming that the penetration rate of learning machines can reach 10% in the future, if iFLYTEK learning machine market share is 20%, according to the price of iFLYTEK AI learning machine on the Jingdong platform, its average unit price is estimated to be about 3,500 yuan, and the income space is 13 billion yuan. If AIGC's ability empowers learning machines to promote sales of high-end models and increase the average unit price of learning machines, it only needs to increase from 3,500 yuan to 5,000 yuan to bring billions of yuan in revenue space growth, and superimposed on the increase in market share, the incremental revenue space exceeds 10 billion.
After-school service platform: The main target compulsory education group, according to the iFLYTEK investor interactive platform, in the county-level after-school platform that has been officially built, iFLYTEK has a market share of more than 50%, most of the revenue comes from students paying according to class hours, and the price in some cities is 300-500 yuan/person/semester, and some are 500-800 yuan/person/semester. In 2022, there will be a total of 158 million primary and junior high school students in China, assuming that the penetration rate of the long-term after-school service platform is 20% and the average unit price is 500 yuan/person/semester, the income space is 15.8 billion yuan/year.
(2) Smart medical care: full scenario coverage before, during, and after diagnosis, and continuous business expansion
Full scene coverage before, during, and after the diagnosis. The company's smart medical business is based on self-learning of medical knowledge, with cognitive reasoning and perceptual interaction as the two wings, and promotes the continuous iterative evolution of diagnosis and treatment assistant and health assistant technology. The company's smart medical business covers all scenarios before, during, and after diagnosis, and provides smart medical insurance services to the Medical Insurance Bureau; Provide smart services, smart medical care, smart operation and smart medical alliance for hospitals; Provide primary doctors with general practitioner assistants, grassroots integrated intelligence information platform, family doctor assistants, AI chronic disease management system, infectious disease intelligent monitoring and early warning platform, etc.; Provide hearing aids, blood pressure monitors and other health hardware for C-end patients. According to iFLYTEK's 2022 annual report, the company's "intelligent medical assistant" is currently the only intelligent auxiliary diagnosis system in the industry that has passed the national occupational physician qualification test. Revenue has grown rapidly, and it has continued to make breakthroughs in the fields of intelligent medical assistant and smart medical insurance. From 2019 to 2022, the company's smart medical business achieved revenue of 1.85/3.13/3.38/467 million yuan, with a compound growth rate of 36.27%, and achieved rapid growth in revenue. By the end of 22, the company has covered 30 provinces (autonomous regions and municipalities directly under the central government) and 380 districts and counties across the country and has been applied normally, assisting grassroots doctors to complete more than 200 million standardized electronic medical records; It has provided more than 530 million AI-assisted diagnosis and treatment suggestions for grassroots doctors, the overall standard rate of electronic medical record writing has increased to more than 90%, more than 1.1 million cases have been corrected and diagnosed by system reminders, and more than 39 million risk reminders have been issued for unreasonable prescriptions.
(3) Open platform and consumer business: empower customers with open technology platform and consumer products
Empower customers with open technology platforms and consumer products. As one of the first national new generation artificial intelligence open innovation platforms, iFLYTEK AI Open Platform is committed to providing developers with industry-leading AI core technologies and continuously building an ecosystem around the developer community. Focusing on the two scenarios of AI+office and AI+life, the consumer business provides consumers with a variety of software and hardware products and services required for daily work and life through hardware products such as smart office books, voice recorders, translators, and software products such as iFLYTEK input method, iFLYTEK APP, and virtual human.
(4) Intelligent cars: layout intelligent sound effects and in-vehicle voice, basically achieve full coverage of mainstream car manufacturers
Intelligent audio and in-vehicle voice basically achieve full coverage of mainstream brand car manufacturers. iFLYTEK provides intelligent interaction, intelligent sound effects, intelligent cockpit, intelligent driving and other scenario solutions for automotive intelligence and digitalization, and its product lines include Feiyu OS, Feiyu intelligent assistant, Feiyu intelligent audio management system, and AI sales service. In terms of intelligent sound effects, the company has completed the systematic sound scene design for the intelligent cockpit based on key technologies such as AI sound effects based on multi-mode integration, AI noise management, in-car communication compensation based on AI perception and 3D surround sound that breaks through space limitations, and relies on multi-mode integration with source ecology, voice, and vision. In terms of voice interaction, according to the company's official account, the company ranks first in the coverage of the domestic in-vehicle voice market, with a large active user group, with an average annual interaction of 3.04 billion. According to the company's annual report, iFLYTEK's intelligent vehicle business has covered more than 90% of China's mainstream independent and joint venture brand car manufacturers, 1200+ cooperative mass production models, and a cumulative installed 39 million+; In the past 22 years, the company's smart car business has shipped more than 7.1 million new front-loading units, with a cumulative shipment of more than 46.1 million sets, an annual number of interactions exceeding 3.04 billion, and an average of 14.88 million monthly active users.
4. Financial analysis: The company's various businesses continue to be empowered, and it has been seriously affected by the epidemic in 22 years
The education sector ranks first in terms of revenue, and smart cities and open platforms continue to be empowered. In the field of education, the company has built a business system for G/B/C customers through the deep integration and application of artificial intelligence core technology and education and teaching scenarios, and iFLYTEK's smart education products have been widely used in 32 provincial-level administrative units and overseas markets across the country. Since 2020, the education sector has consistently ranked first in the company's revenue contribution, accounting for 34.11% of total revenue in 2022. In 2022, the education sector business brought the company 6.419 billion yuan in revenue, with a CAGR of 36.97% from 2019 to 2022. Focusing on the digital transformation of the government and the improvement of the quality and efficiency of office case handling in political and legal business, iFLYTEK provides AI-based products and comprehensive solutions at the level of urban governance, government services, and industrial development. Since 2019, the proportion of business revenue in smart cities has decreased slightly, related to its rapid development of other areas such as education, but it is still in the forefront, with smart city business revenue accounting for 23.63% of total revenue in 2022. From 2019 to 2022, the proportion of revenue of open platform and consumer business is stable at about 24%, and the company provides full-chain services for developers and upstream and downstream resource partners in the industry with the first batch of "national new generation artificial intelligence open innovation platform" iFLYTEK artificial intelligence open platform, and at the same time, around AI+ office scenarios, through smart office books, voice recorders, iFLYTEK APP and other products, to provide consumers with products and services required in office scenarios. In addition, the company also provides customers with multi-scenario AI solution business in operators, smart healthcare, smart cars, smart finance and other business fields.
In 22 years, affected by the epidemic, the growth rate of revenue declined, and the gross profit margin fell slightly. From 2018 to 2021, the company's operating income has steadily increased, with a CAGR of 32.25%. In 2022, due to factors such as the epidemic and project bidding, the company's revenue growth slowed down, but revenue still maintained a slight growth, mainly due to the company's sustainable base business, which offset the impact of major project delays. From 2018 to 2021, the company's non-net profit increased steadily, and in 2022, it fell sharply, which was caused by the company's new investment of about 800 million yuan in the direction of continuous operation base business such as education and medical care, new product research and development, independent controllable core technology and localization adaptation. From 2018 to 2021, the company's net profit attributable to the parent increased rapidly, with a CAGR of 42.13%. In 2022, due to the impact of the epidemic and the impact of the company's shareholding of financial assets such as Sanrenxing, Cambrian, and SenseTime, the amount of fair value change income decreased by 582 million yuan compared with the same period of the previous year, and the company's net profit attributable to the parent decreased significantly. Since 2021, the company's gross profit margin has declined slightly, mainly due to the increase in the proportion of revenue of information engineering business in the smart city business with low gross margin level and the increase in operating costs caused by the increase in the number of personnel. It is expected that the impact of the epidemic will gradually weaken in the future, the company's "strategic base" layout and "systematic innovation" advantages will gradually bring benefits to appear, net profit attributable to the parent and non-net profit are expected to return to growth, and gross profit margin is expected to be improved.
R&D investment continues to increase, and the total expense ratio is well controlled. iFLYTEK has continued to invest intensively in key core technologies, and from 2018 to 2022, the company's R&D investment has increased year by year, and the R&D rate has increased from 15.95% in 18 years to 16.53% in 22 years. In 2022, due to the impact of the epidemic, sales rates increased slightly. The company's management rates are generally on a downward trend, with a decline of nearly 20% from 2018 to 2022. The company continues to expand the scale of talents, and the number of employees continues to increase. From 2018 to 2022, the company's per capita revenue increased year by year, and in 22 years, due to the impact of the epidemic, per capita profit and per capita gross profit declined.
The company's monetary funds are sufficient, and the level of debt repayment is relatively stable. The company has sufficient monetary funds, and the funds are expected to be used for R&D investment in new technologies and products and equity acquisitions of the company. In 2021, the Company's operating cash flow declined to RMB890 million, mainly due to an increase in cash for goods purchased and paid for services. The company's sales collection in 2022 was 17.643 billion yuan, an increase of 2.81% over the same period last year, which maintained a benign and healthy match with the company's revenue growth, and the company's operating cash flow and sales collection maintained a good trend. In recent years, the company's revenue scale has continued to grow, resulting in rising accounts receivable, and the company's overall operating conditions have been stable. The company's debt service level is relatively stable, and the asset-liability ratio remains in the range of 40% to 50%.
Second, the Spark Cognitive Big Model 1+N empowers vertical industries
In December 2022, iFLYTEK launched the "1+N" task of generative pre-training large model, of which "1" is the Spark cognitive intelligence large model and "N" is the special large model version used in education, medical, human-computer interaction, office and other industries. On May 6, 2023, the company officially released the Xinghuo model, and on June 9, the V1.5 upgrade version was released, and the Xinghuo model has been applied in six industries: education, medical, industrial, office, automotive, and digital employees, opening up new space for iFLYTEK's business growth.
iFLYTEK has three advantages in large model training: core algorithm accumulation, data accumulation and application, and computing power support.
Core algorithm accumulation: iFLYTEK has rich experience in Transformer deep neural network algorithms for many years, and in 2022, it has won 13 international competition champions of cognitive intelligence, including the Common Sense Reading Comprehension Challenge Open Book QA, Knowledge Reasoning Reading Comprehension Task QASC, and the Logical Reasoning Base Period Reading Comprehension Challenge ReClor. It has open-sourced a series of Chinese pre-trained language models in 6 categories and more than 40 general domains, and has obtained the first and far second place in the number of stars of similar Chinese pre-trained language models on the Github platform.
Data accumulation and application: iFLYTEK has the accumulation formed by years of research process of the National Engineering Research Center for Speech and Language Information Processing, and the company's products have a leading market share in the Chinese speech market, providing the company with rich Chinese text data accumulation; At the same time, the company's in-depth application in education and medical industries has accumulated more than 50TB of industry corpus for the company, and the daily usage of iFLYTEK's artificial intelligence open platform exceeds 5 billion people, providing the company with vertical data resources in professional scenarios; The company's wide application in education, medical care, smart city, office, automotive and other fields also provides application scenario guarantee for the innovation and promotion of large models.
Computing power support: The company has its own data center at the headquarters, and has built a deep learning computing platform of 4 cities and 7 centers, which has achieved nearly a thousand times the acceleration of the reasoning efficiency of tens of billions of parameters in engineering technology, laying a hardware foundation for large model training and large-scale application. In addition, the company's training and reasoning solutions on the domestic platform have been put into shape, and the company has also taken the lead in undertaking many projects of the national independent and controllable artificial intelligence platform, and established in-depth cooperation with Huawei, Cambrian, Dawning and other enterprises to achieve independent and controllable large model training.
The Spark model has strong capabilities such as text generation, multi-round dialogue, logical reasoning and code generation, so as to realize the upgrading and reshaping of AIGC capabilities to the company's vertical industry applications. The big model of iFLYTEK has seven dimensions of general artificial intelligence, such as text generation, language understanding, knowledge question and answer, logical reasoning, mathematical ability, code ability, and multimodal ability, and V1.5 version further brings stronger open-ended knowledge question answering ability, logical reasoning and mathematical ability, and multi-round dialogue ability, so as to realize the real-time information update of the large model. The content generation capability provided by the large model will empower the application application in education, industry, medical and other scenarios, support consumer products such as iFLYTEK hearing and office hardware to achieve stronger text summarization and generation capabilities, improve the accuracy of human-computer interaction experience and personalized service of iFLYTEK's various products, and improve the value of iFLYTEK's major product lines as a whole. At present, iFLYTEK has combined the Spark model with six product lines of education, office, automotive, digital employee, industry and medical to achieve a greatly improved degree of personalization in the scene, smoother human-computer interaction experience, and achieve the upgrading and reshaping of the company's vertical industry applications by AIGC capabilities.
Education: The learning machine realizes advanced marking of essays, can identify typos, incomprehensible sentences, and evaluate the content according to the composition requirements, and quickly complete the 30-minute correction amount of ordinary teachers; English composition corrects spelling errors, vocabulary usage, and sentence structure. iFLYTEK Xinghuo APP provides AI open English dialogue practice capabilities, and realizes AI virtual teachers, real-time oral error correction, multilingual translation and other functions.
Medical: iFLYTEK Spark model empowers the post-diagnosis rehabilitation management platform, which provides patients with detailed post-diagnosis rehabilitation plans based on various patient visit data, and can make real-time adjustments according to the patient's follow-up examination results and doctor's feedback; In addition, the AI online consultation function can conduct detailed questions about the patient's symptoms, and give targeted suggestions according to the patient's medical records and main symptoms.
Industry: iFLYTEK Antelope Industrial Internet Platform is a "double-span" industrial Internet platform of the Ministry of Industry and Information Technology, relying on AI + big data capabilities to achieve efficient docking of enterprise service supply and demand. After combining with the Spark Big Model, the iFLY Antelope APP analyzes AI enterprise business problems through the capabilities of the big model, the knowledge base and service resources on the industrial platform, provides docking and recommendation of related services and solutions, and achieves efficient matching of supply and demand. In addition, enterprises can build enterprise knowledge brains based on the Spark model, and realize AI to assist enterprise operations through industrial knowledge base + enterprise internal knowledge base + Spark model.
Office: Provide regular discourse and regularity before and after comparison in office products such as office books, voice recorders, iFLYTEK hearing, meeting minutes and summary of meeting points according to handwritten content, and one-click drafts according to the recording of various styles such as product publicity copywriting and press releases, and can be translated into multiple languages. Xinghuo model + iFLYTEK smart screen realizes multi-modal minutes of meetings, multi-style minutes sorting, and automatic work to-do output.
Automotive: Realize real-time voice interaction in the car, realize route search, trip planning, story reading, telephone recording and minutes.
Digital Workforce: Enabling smarter virtual human interaction; Based on the Spark model, users can use natural language to control iFLYTEK RPA, complete automatic data analysis and generate data analysis reports in the form of PPT.
It is expected that the Spark Cognitive Big Model will still generate revenue for the company in the model of platform + track. On the one hand, as the company's AI capability base, the Spark cognitive big model can directly empower developers with the model of platform open API interface, and the current possible charging models in this form include subscription fees, per-traffic charges or licensing fees. Referring to the current charging standard of ChatGPT ($0.002 / 1K tokens), assuming that the price of Xinghuo API is about 15 yuan/1M tokens, assuming that the average daily number of users per connected application is 1 million, and the average person uses 1000 tokens per day, then a single application can contribute 15,000 yuan of revenue per day. If the Xunfei Spark model can empower 400 applications, the Spark model API can contribute 2.2 billion yuan per year. On the other hand, the Spark model can directly empower the company's education, medical, office, automotive and other industry vertical applications, improve product functions, and further increase the company's revenue by improving ARPU and user stickiness.
The Spark Assistant Center opens user-defined AI capabilities, and the Spark Assistant ecosystem expands the functional boundaries of large models. iFLYTEK launched the Spark Assistant Center, which has launched 200+ assistants, including article editing, contract assistants, career planners, mock interviewers, etc. The Spark Assistant Center supports users to build the required Spark Assistant functions by setting the assistant type, function description, whether context understanding is required, assistant instructions (prompt) and other fields, and can be put on the assistant market to enable user co-creation of AI capabilities. On the one hand, the Xinghuo Assistant Center allows users to build standardized and reusable AI capabilities according to their own needs to improve the experience of using Xinghuo large models, on the other hand, users can open the assistant capabilities to all users of Xinghuo, build a Spark assistant ecology, expand the functional boundaries of large models through user co-creation, and enhance the value of products.
Capability + plug-in + industry openness and co-creation, iFLYTEK and developers to build a spark ecosystem. At present, iFLYTEK has 4 million+ real-name verified developers and 5 million+ partners, based on the AI capabilities of the Spark model, iFLYTEK will provide in-depth training and empowerment for ecological partners from products, technologies, ecological resources, channel systems, etc. In addition, iFLYTEK will also open the Spark large model plug-in capability to further expand the boundary of large model capabilities through the developer ecosystem. In terms of industrial cooperation, iFLYTEK has reached cooperation intentions with more than 3,000 enterprises in 36 industries, opening up the space for vertical industry empowerment of Spark Big Model.
Third, iFLYTEK Super Brain 2030 points to the future
1. iFLYTEK Super Brain 2030 Plan: Artificial intelligence industry leader, three-stage node orderly realization plan
AI robots enter every family and solve major social problems in the future. The "iFLYTEK Super Brain 2030" plan is a major project that iFLYTEK will launch, plan and guide the company's medium- and long-term technology and product development roadmap in 2022. The main content is to build a complex intelligent system based on cognitive intelligence that is self-evolved by human-machine collaboration, so that the machine's perception ability can adapt to various complex scenarios, deeply understand domain expertise, and have the ability to continuously learn independently. With the implementation of the plan, machines can realize all-round perception of people and the environment, understand knowledge from all walks of life, have general knowledge and emotions, can exercise flexibly, can express multi-dimensionally, and artificial intelligence is expected to enter the family to solve major social propositions such as the aging of the population in the future.
Three important stages plan nodes to achieve iFLYTEK Super Brain 2030 in an orderly manner. The first phase (2022-2023): breakthrough in bionic robot ontology technology, multimodal perception and expression technology, active dialogue technology, etc., and launch a robot that can be cultivated into robotic pets, bionic sports robot dogs and other software and hardware integrated robots; Based on iFLYTEK's virtual human interactive platform, virtual humans are equipped with industry and professional knowledge in healthcare, teaching, finance, customer service and other industries, and create a professional virtual human family. The second phase (2023-2025): the launch of adaptive walking exoskeleton robots and accompanying digital virtual human families, through which the elderly can achieve normal walking and exercise, and the launch of a depression screening platform for adolescents at the same time. The third phase (2025-2030): Launch a companion robot that understands knowledge and can learn and a family of self-learning virtual humans, and fully enter the family.
Focusing on "iFLYTEK Super Brain 2030", iFLYTEK plans to release three key products in the first phase: Professional virtual human: Build a virtual human family with professional knowledge under the digital economy to provide practical help for the virtual world and metaverse of the digital economy. iFLYTEK's AI virtual human interaction system has passed the evaluation of the basic capabilities of the first batch of digital human systems in China, and has developed hundreds of images and voices such as virtual assistants, virtual service robots, and virtual IPs, providing virtual human solutions for more than 400 customers in media, finance, cultural tourism, government affairs, e-commerce and other industry scenarios. Can be developed into pet toys: use active dialogue, scene perception and understanding technologies to achieve continuous development and learning of pet toys. Adolescent depression screening platform: Based on multimodal perception, understanding, natural dialogue interaction and other technologies, it realizes the full screening of depression in children and adolescents. According to the public account of iFLYTEK, at present, in the measured data of Anding Hospital, the accuracy rate of iFLYTEK's depression screening has reached 91.2%, the level of adolescent test anxiety has dropped from 34% to 17%, and the general anxiety has dropped from 80% to about 60%, and the adolescent depression screening platform will be officially promoted to the whole country in 2023.
2. Phased achievements: breakthroughs in the four core technologies of multi-mode perception, multi-dimensional expression, deep understanding and motion intelligence
The iFLYTEK Super Brain 2030 plan has formed four core technology breakthroughs: multi-mode perception, multi-dimensional expression, deep understanding, and sports intelligence. "Multi-mode perception" opens up a new mode of human-computer interaction. iFLYTEK has realized the combination of multimodal cognizance, gesture recognition, eye recognition, speech recognition and other multimodal at the multi-mode perception level, realizing the fusion perception of speech and vision, eyes, facial expressions, body language, and environment, and the specific landing capabilities include complex scientific formula recognition, volley handwriting recognition, eye typing, and speech recognition available in high-noise complex scenarios.
The "multi-dimensional expression" capability supports technological innovation related to virtual humans in the AICG field. In the field of speech synthesis technology of AIGC, iFLYTEK Research Institute proposed the SMART-TSS framework, which uses pre-training of text and speech to provide 11 emotions, each of which has 20 levels of strength and weakness adjustment. At the same time, users can also adjust the creative ability of the system sound according to their preferences, such as pauses, stress, speech speed, etc., to achieve the ability of real human expression with personalized characteristics.
The ability to "deep understanding" helps make breakthroughs in the cognition of interactive systems. In 2022, iFLYTEK made breakthroughs in the field of key technologies for cognitive interaction systems, and won three international championships by relying on the State Key Laboratory of Cognitive Intelligence built by iFLYTEK, which has raised the deep comprehension ability of reading comprehension to the level of knowledge reasoning ability.
"Motion intelligence" promotes "human-machine collaboration" into a new era. iFLYTEK has increased the combination of AI algorithms and motion control to enable robots to have fine motor capabilities to meet the needs of more complex working conditions. At present, the company has developed quadruped robots for outdoor inspection and chemical inspection with industry partners, flexible robotic arms for industrial quality inspection and commercial services, etc., and launched the robot superbrain platform AIBOT, which integrates core capabilities such as multi-mode interaction, deep understanding, motion control, and hardware modules to provide high-performance computing power support, efficient map navigation and high-precision positioning functions for physical robots.
3. Market space: multi-scenario applications drive the development of the virtual human market, and the aging population accelerates the demand for companion robots
Multi-scenario applications drive the development of the virtual human market. The construction of digital virtual humans is the focus of the "iFLYTEK Super Brain 2030" plan. Virtual humans are mainly divided into service-oriented virtual humans and identity-oriented virtual humans, of which service-oriented virtual humans are functional, realize content production and reduce the cost of existing service-oriented industries. Identity-type virtual people have identity, most of which are presented as virtual idols, which can provide spiritual companionship for human beings and become an interactive intermediary in the virtual world. iFLYTEK is committed to building a virtual human family with knowledge from all walks of life, including both service virtual humans and identity virtual humans, aiming to continuously evolve towards companion virtual humans and self-learning virtual humans, to achieve full coverage of application scenarios, which is expected to drive the development of medical, finance, teaching, finance, customer service, entertainment and other industries. According to iMedia Consulting, in 2021, the market size and driving market size of China's virtual human core industry will be 6.22 billion yuan and 107.49 billion yuan respectively, and it is expected to reach 48.06 billion yuan and 640.27 billion yuan respectively in 2025, and the virtual human market space is broad.
The company's exoskeleton robot has developed prototypes, and policies promote the construction of related applications. Exoskeleton robot is a new type of mechatronics device proposed by imitating biological exoskeletons, providing basic functions such as protection and coordinated action for wearers, which is the key product of the second phase of "iFLYTEK Super Brain 2030", its main goal is to have adaptive motor functions to help disabled and elderly people with reduced mobility walk independently. At the 2022 Annual Meeting, iFLYTEK announced that a joint robotics laboratory jointly established with the University of Science and Technology of China has developed a prototype of an exoskeleton robot with rehabilitation training. The mainland exoskeleton robot industry started late, and it gradually entered commercialization around 2015, and the future development prospects are huge. According to Global Newswire, the market size of China's exoskeleton robot industry will grow at an annual rate of about 25%, and by 2027, the industry size will exceed $300 million. In order to promote the development of medical rehabilitation industries such as mainland exoskeleton robots, various national government departments have successively issued relevant policies since 2021 to encourage the combination of artificial intelligence, robot technology and medical rehabilitation, and expand the application of robots in medical services, elderly care and disability assistance and other fields.
The aging population has intensified the demand for companion robots, and the future market scale of intelligent health care robots is large. The entry of companion robots with intelligent health care functions such as basic health and elderly medical companionship for the elderly group into the home is the goal of the third stage of the future of "iFLYTEK Super Brain 2030". According to the National Bureau of Statistics, in 2022, the mainland population aged 60 and above will be 280.04 million, accounting for 19.8% of the national population, of which 209.78 million will be aged 65 and over, accounting for 14.9% of the national population. Compared with 2021, the elderly population over 60 years old increased by 12.68 million, an increase of 0.9%, and the elderly population over 65 years old increased by 9.22 million, an increase of 0.7%. With the continuous increase of the total number and proportion of the elderly population, the aging of the mainland population continues to increase, providing a broad market space for companion robots with intelligent health care characteristics. At the same time, such robots can solve problems such as high employment costs of medical care workers and empty nest elderly families, and have good development prospects. According to Frost & Sullivan in UBTECH's prospectus (application version (first submission)), the market size of China's intelligent health care robots in 2021 will be about 1.4 billion yuan, with a CAGR of 62.7% from 2017 to 2021, and with the further increase in demand, the market size of China's intelligent health care robot solutions is expected to reach 6.2 billion yuan in 2026.
4. Profit forecast
Education field: Education is the company's key expansion area, and the decrease in the growth rate of education business revenue in 2022 is mainly due to the macro environmental impact, and there were more than 20 projects and more than 3 billion yuan of contract extensions at the end of 22. In 2023, although the macro environment still has a certain impact, it is expected that with the gradual landing of the extended project, and the company's Spark cognitive big model empowers education applications, improves product value and customer willingness to pay, it will gradually increase the growth rate of education revenue in 23-25 years, and it is expected that the education business will usher in rapid growth from 2024. Open platform and consumer, smart medical, smart car business: Directly benefiting from the release of Xinghuo's cognitive big model, it is expected that the generation, interaction, and personalized service capabilities brought by the big model will directly bring about an increase in the number of users of iFLYTEK's open platform and ARPU, and at the same time enhance product functions in consumer business, medical, automotive and other fields, and increase revenue growth in related fields. It is expected that the relevant business will still be affected by downstream demand and macro environment to a certain extent in 2023, and will resume rapid growth from 2024.
Operator-related business: Assist operators and customers such as radio and television to build smart homes, intelligent customer service, call assistants, AI platforms and other functions, as operators shift from large-scale operation to value operation, it is expected that the company's related products will still have a high demand boom and achieve rapid growth. Smart city: 22 years of macro environmental impact growth pressure, it is expected that in 23-25 years with the recovery of government demand, digital government applications will gradually resume steady growth, smart political and legal application growth has been relatively saturated, business growth may be relatively limited, the overall smart city business is expected to maintain a steady growth trend in 23-25 years. Smart Finance: Provide financial customers with AI+ scenario applications such as AI middle platform, knowledge middle platform, smart marketing platform, virtual digital human, smart insurance, etc., and it is expected that with the further promotion of virtual human and other applications, smart financial business will maintain stable growth. We expect the company's revenue to be 212.86/275.39/34.203 billion yuan in 23-25 years, a year-on-year increase of 13%/29%/24%; It is estimated that the net profit attributable to the parent of the company in 23-25 years will be 7.66/10.03/1.307 billion yuan, a year-on-year increase of 37%/31%/30%.
(This article is for informational purposes only and does not represent any investment advice from us.) For information, please refer to the original report. ）
Selected report source: [Future Think Tank]. 「Link」