Company Introduction
Deeply engaged in the field of artificial intelligence and speech language, newly released the Xinghuo cognitive model. Founded in 1999 and listed on the Shenzhen Stock Exchange in 2008, the company focuses on the field of intelligent voice and artificial intelligence, adopts the development strategy of "platform + track", in 2010 the company released the iFLYTEK open platform to provide developers with one-stop artificial intelligence solutions, and on this basis, continue to expand the industry track, the industry covers smart city, smart justice, intelligent services, smart cars, smart medical and other fields, and provide products and services for consumers and operators; Form a good pattern of two-way drive on the To B and To C sides. In 2023, the company launched the Xinghuo cognitive big model, and showed the product landing of the large model in various fields, obtained the admission ticket to the AI model track, and realized the product landing.
Shareholding structure
iFLYTEK Co., Ltd. was first a start-up project of Dr. Liu Qingfeng and 18 teachers and students of the University of Science and Technology of China, and completed the A-share IPO in 2008, forming a stable equity structure after years of development. The founder, Mr. Liu Qingfeng, directly holds 7.24% of the equity, and jointly owns 17.32% of the voting rights with the concerted actor China University of Science and Technology Asset Management Co., Ltd., and the second largest shareholder is China Mobile, an important customer of the company, and the overall equity structure is relatively scattered.
The main reason for the company's equity structure is that the company is engaged in the industry of artificial intelligence software technology industry with more investment in the early stage, which requires large financing support, and China's VC industry is still not mature in the early stage of the company's entrepreneurship, according to Wind statistics, the company's A share before listing experienced 5 rounds of VC financing, greatly diluting the founder's shares, in 2008 the company landed on the A share before the founder Mr. Liu Qingfeng is no longer the largest shareholder. China Mobile, an important strategic shareholder of the company, subscribed for 15% of the share capital in 2012 by participating in the private placement, and then reduced some of its holdings in 2020.
Most of the company's management is from the University of Science and Technology of China and has rich experience in the artificial intelligence industry.
Top 10 outstanding shares
As of March 31, 2023, the top ten circulating shareholders held 710 million shares, accounting for 33.38% of the outstanding shares, an increase of 6.085 million shares over the previous period.
Company product introduction
The company's main business model is AI+, aiming to promote industrial intelligent upgrading with advanced artificial intelligence technology, and the business models that have been implemented include "AI+Education", "AI+City", "AI+Healthcare", "AI+Industry", "AI+Operator", "AI+Automobile", "AI+Service", "AI+Office", "AI+Life", "AI+Digital", "AI+Ecology", comprehensively covering the AI needs of governments, enterprises and individuals.
The following are the revenue split of iFLYTEK (RMB thousand) and the revenue ratio of iFLYTEK in 2022.
Comparison of similar products
The scale of the learning machine market continues to expand driven by the increase in penetration rate, and technology-based enterprises represented by iFLYTEK are gradually replacing traditional terminal enterprises. Learning machines (educational tablets) have been a niche and stable market in the past, and the industry has developed for 30 years, but the penetration rate is not high, only about 3%. Before the practical application of AI technology in educational tablets, the main players in the industry were traditional brands such as BBK and Yoshulang, and in the later period, with the continuous landing of AI technology in education scenarios, the market pattern has undergone great changes. Enterprises with advantages in AI technology represented by iFLYTEK seize the opportunity of industry change and quickly seize market share. The following figures show the learning tablet market share 2020Q3 and the learning tablet market share 2021Q4-2022Q2.
Financial analysis
iFLYTEK is a rare company with stable profitability among China's multi-track AI+ companies, AI as a new technology industry, industry participants often face huge losses caused by industrialization difficulties, and few pure AI+ companies are listed separately. Since its listing, iFLYTEK has always adhered to the strategic policy of attaching equal importance to technology development and industrial landing, and has maintained stable growth in revenue and profit since its listing, and after forming a world-leading technology accumulation and mature business model in speech, the company has continued to make breakthroughs in the direction of imaging and other technologies, and finally explored a mature business model on multiple tracks in terms of industrialization.
Since its listing in 2008, the company's revenue and gross profit have maintained positive growth, while net profit excluding non-attributable parent has only been negative in 2016, 2018 and 2022, and maintained positive growth in the remaining years. The following are the company's revenue, gross profit and net profit deducted from non-attributable parent (thousands of yuan), the company's revenue, gross profit and net profit deducted from non-attributable parent YOY (%).
The continuous revenue growth is mainly directly related to the company's continuous development of new business tracks, the company focused on the development of voice AI technology in the early stage, built a ToB business model with voice as the core, and gradually expanded the technology beyond the voice track on the basis of consolidating the leading level of voice technology in the later stage, and entered the fields of education, smart cities, and smart cars.
The company's selling expenses and administrative expenses and R&D expenses have been in a benign range, and the combined expense ratio of the three expenses in the annual report does not exceed 45%, and only 58.2% in 2023Q1. The following are the company's selling, management and R&D expense ratio (%).
Peer financial comparative analysis
The company's financial performance is at the forefront of China's AI+ industry. Due to the difficulty of monetizing business models and the huge cost of R&D AI technology, Chinese AI+ companies generally face losses. iFLYTEK has maintained profitability for many years, and is the leading technology industrialization among Chinese AI+ companies, with good profitability. The implementation of the company's "standing tall" strategy has been very successful, transforming the advanced technology of the castle in the sky into real profits and cash, providing sufficient guarantee for subsequent technology research and development.
The company's revenue scale is far ahead. Ranked first among Chinese AI+ companies that have disclosed financial data, and far ahead of second place. The following are the revenue scale of AI+ companies (100 million yuan), the gross profit margin of AI+ companies (%), and the net profit margin attributable to the parent of AI+ companies (%).
Source: Wind, Megvii Technology Prospectus, YITU Technology Prospectus, Presumptive Medical Technology Prospectus, Shukun Technology Prospectus, Beijing Keya Ark Prospectus, Guolian Securities Research Institute
iFLYTEK is the only comparable AI+ company that can achieve continuous profitability, and the strategy of "standing tall in the sky" is relatively successful.
Source: Wind, Megvii Technology Prospectus, YITU Technology Prospectus, Presumptive Medical Technology Prospectus, Shukun Technology Prospectus, Beijing Keya Ark Prospectus, Guolian Securities Research Institute
Source: Wind, Megvii Technology Prospectus, YITU Technology Prospectus, Presumptive Medical Technology Prospectus, Shukun Technology Prospectus, Beijing Keya Ark Prospectus, Guolian Securities Research Institute
iFLYTEK is the only company in China AI+ that can achieve positive net cash flow from continuing operating activities, second only to SenseTime in terms of cash on the books. The cash situation of the following AI+ companies.
Investment highlights
The company adheres to the strategy of technology topping the sky \ industrial location, and has revenue and profit
The company is an industry leader in cognitive AI technologies such as speech, translation, and images, and has won many awards in many competitions around the world, especially in the field of voice technology, maintaining an absolute market share of 60%. At the same time, the company has realized the industrialization of AI technology through technical advantages, and the company has achieved a cumulative net profit of 4.84 billion yuan from 2007 to 2022. Among China's AI+ companies, iFLYTEK is a scarce company that can achieve revenue of 10 billion yuan and has not lost money for 16 consecutive years.
The large model will promote the qualitative change level of the company's business
Big model technology can form good synergy at the data and application levels, and promote qualitative change in education, office and medical services in relatively mature downstream fields. The company's education, smart hardware and smart healthcare have all achieved a CAGR of more than 30% in the past five years, and it is expected that better products are expected to further increase the industry penetration, and it is also expected to further expand the market share lead of non-smart products.
Smart education has broad space
According to the forecast of Huajing Industry Research Institute, the space size of China's education informatization market in 2021 will be about 500 billion, and we estimate that the market size of C-end learning machine business companies will be about 54 billion in 2025, and the demand is in a period of rapid growth, and smart education provides a broad space for the company's development.