The capital market in China, the pace of development has just faltered for 40 years. If for a person, even if he enters the age of not confused, he knows a lot about things, and sometimes he can put on the "old qualification". But if we broaden our horizons and put it on the big stage of the world capital market, China's capital market is still quite young, sometimes very immature, and there is still a lot of content to learn new courses and make up for old courses. Leaving aside anything else, in terms of the recent artificial intelligence (AI) technology storm set off by ChatGPT, there are many shortcomings that China's capital market urgently needs to make up.
The first valuation robot was born, and discovering new applications on large models is the way out
"Hello everyone! My name is 'Little V' and I'm a ChatGPT-based Conversational Valuation Bot (V-Bot)."
This kind of voice appearing in conversational bots, introducing the company's business, or even answering some questions from customers, is nothing new. But for Little V, what is new is that she can not only provide customers with business valuation services, but also answer customers' questions about valuation and other related questions through dialogue.
"This is the first conversational robot in China that uses ChatGPT technology and is independently developed by Beijing Flowwise Valuation Technology Co., Ltd. (hereinafter referred to as "FlowWise") in the field of valuation in China. Zhang Xinghui introduced with a little pride. Mr. Zhang Xinghui is the founder and CEO of Flow Valuation, an adjunct professor at the School of Information Management of Wuhan University, and has worked in Europe and the United States for more than 10 years.
Since March this year, the phenomenal application ChatGPT developed by the American artificial intelligence company OpenAI has become popular all over the world. Nvidia founder Jensen Huang called it "AI's iPhone moment." Why did OpenAI's ChatGPT break through? The general consensus in the industry is that big data, big computing power and big investment converged on the big language model (LLM) at the right time, the so-called "violent aesthetics" appeared, and the "intelligence emerged" happened.
Riding this initial wind, many of China's Internet giants have announced that they have "own big models". For example, Baidu's "Wen Xin Yiyan", Ali's "Tongyi Qianqian", and so on. Whether these big factories really have their own big models, or bluff to do PR (public relations), it is still unknown. But many experts believe that in the current situation, it is very difficult for Chinese companies, especially small and medium-sized companies, to make a difference in the big model. From a business perspective, small and medium-sized companies exploring innovative applications in vertical fields is the right direction and way out.
"The history of giants such as Microsoft, Google and Facebook speaks volumes about the harsh reality of the winner-take-all era in the digital economy. Therefore, we seized the opportunity to develop and launch the valuation robot V. Zhang Xinghui said in a firm tone, "Little V is a nickname, abbreviated as V-Bot, and the full name is Valuation Robot."
It is understood that the development base of the small V is ChatGPT3.5. The main function of the "base" is to use ChatGPT's large language model to answer common questions in valuation, such as the status of the company's industry, the development of the benchmarking enterprise, the significance of valuation, and the latest technology of international valuation.
"For valuation, ChatGPT is only ancillary. The core barriers are our self-developed valuation models, the valuation database accumulated for many years, and the combination of international cutting-edge digital technologies. Zhang Xinghui said. Founded in December 2016, Flow Valuation has been deeply engaged in the research and development of artificial intelligence products in the capital market, and its Manshu AI series products have reached more than 20 models, of which Xiao V is only the latest member.
Valuation is the soul of all investment and financing, and technology valuation is the way out
The launch of the XiaoV valuation robot is like throwing a stone into the stagnant water in China's valuation field, which can not only serve as a ripple of pushing waves, but also should ring a long-term alarm bell for China's investment and financing community. Because in the international mature basic market, valuation is a professional work, but also an increasingly mature technical work. Goldman Sachs, a well-known US investment bank, publicly declared itself "a high-tech company" a few years ago; Another equally well-known American investment bank, Morgan Stanley, also publicly announced one of its recruitment criteria - those who do not know Python are not allowed to enter the industry; BlackRock, the world's largest asset management company, has developed Aladdin, a technologically advanced, complex and extremely difficult platform.
In the face of complex financial markets, what should be the core link? Chinese and foreign financial giants have already given the answer. Warren Buffett once said that if business schools offer only one course, it is "both a boring valuation course"; Hong Lei, former chairman of the Asset Management Association of China, also publicly declared that valuation is the "core competitiveness" of fund managers.
However, in the practice of China's capital market, especially the primary market, valuation has not only not been taken seriously as it should, but also "chaotic phenomena such as following the trend, patting the head, and asking for sky-high prices". Therefore, it is not difficult to understand that when the Asset Management Association of China issued the Guidelines for the Valuation of Unlisted Equity Investment of Private Investment Funds (Trial) in 2018, it clearly announced that "in order to guide the professional valuation of private equity investment funds..., this guideline is specially formulated".
Zhang Xinghui believes that valuation can be summarized in three categories: obscurantism valuation, professional valuation and human valuation. At present, most of China's primary market is in the first stage, there is no professional and generally accepted rules, and everything depends on "following (wind), patting (head), and talking (judging)"; Human nature valuation mainly refers to the natural valuation of human greed and fear; Professional valuation is based on laws and regulations, internationally recognized practice cases and generally accepted valuation models.
Since its establishment, Flow Valuation has been taking the road of professional valuation in the spirit of "technology-driven valuation". "From the beginning, our technical framework was built on the more mature branch of artificial intelligence, the expert system (ES). We insist on the innovative use of cutting-edge digital technology, and build our own database, model library and knowledge rule database with independent intellectual property rights. Liu Xiaobo, chief technology officer of Flow Wise, said. Mr. Liu Xiaobo is an expert in machine learning/deep learning technology and has been the AI intelligent brain architect of JD Logistics for many years. (The figure below is the technical framework diagram of Flow Assessment)
At the same time, the AI valuation system of Flow Valuation has its own distinctive characteristics. "We have developed a valuation index system with independent intellectual property rights." Su Zhengyu, chief valuation officer of Flow Wise, said. Ms. Su Zhengyu is the co-founder of Flow Valuation and a member of the International Society of Valuation Analysts. "I often attend international valuation conferences to exchange valuation techniques and practical experience with international peers." Ms. Su said with a smile, "Our AI valuation has been generally praised by international peers." (The figure below shows the valuation index system of Flow Wise)
In the past 7 years, Flow Wisdom has continuously iterated products, upgraded technology, and continuously provided quality services for customers and capital markets, and its service products are uniformly named "Manju AI". The best way to understand how ManjuAI works is to think of it as a mechanical machine with inputs, outputs, and constant operation. (as shown below)
"It can be seen that Manshu AI series products are the use of intelligent software to generate various reports needed for investment and financing, such as valuation reports, due diligence reports, business plans, financial early warning reports, post-investment management reports, etc.," Zhang Xinghui introduced, "These reports, the current loud name is AIGC (artificial intelligence generated content)."
It is understood that in order to increase the professionalism and authority of "Manshu AI", Flow Wise Valuation has participated in the formulation of a series of national valuation norms. For example, the National Regional Equity Market Valuation Guidelines and the Valuation Standards for China's Small, Medium and Micro Enterprises. At the same time, Flow Valuation also owns more than 30 software copyrights directly related to enterprise valuation, and is also a corporate member of the International Association of Valuation Analysts. In practice, Flowwise has become a valuation provider of the Shenzhen Stock Exchange's technology financing platform and more than 20 equity trading centers across the country, providing valuation services for tens of thousands of enterprises.
"There are more than 40 million small and medium-sized enterprises in China, and in order to provide them with professional services, technical means are necessary, especially to pay attention to the huge potential of AI." Zhang Xinghui emphasized, "The advent of Little V marks the latest application of the latest artificial intelligence technology in China's capital market, especially in the field of valuation. In the future, while providing professional and efficient valuation services, XiaoV can also contribute to the standardization, technology and digital development of China's capital market. ”
Scientific and effective valuation tools are imperative, and "medium special valuation" calls for an AI technology revolution
Perhaps, Yi Huiman, chairman of the China Securities Regulatory Commission, realized early on that all transactions must be priced; Especially in capital transactions, valuation pricing is the soul. Therefore, in November 2022, he publicly stated at the annual meeting of the Zhongguancun Financial Forum that he would explore the establishment of a "valuation system with Chinese characteristics (Zhong Special Valuation)".
Experts generally believe that the so-called "China Special Valuation" is essentially to guide the market to discover a reasonable way to price the valuation of high-quality assets, and promote the high-quality development of high-quality central state-owned enterprises and private enterprises. Therefore, the valuation will change from "hidden rigid demand" to "explicit rigid demand", and the market is very broad.
From the perspective of fund management, at present, the total amount of funds managed by Chinese fund institutions exceeds 20 trillion yuan, of which more than 60% is funded by the government. The money paid by the government, which comes from taxpayers, must be strictly regulated. According to relevant sources, in the near future, all government-funded funds investing in equity should have a "valuation report on the record".
"Flow Wise developed two products three years ago – the government-funded fund performance evaluation system and the government-funded fund valuation system." Zhang Xinghui said with confidence, "These two products will definitely come in handy in the future."
In recent years, the central government has continuously introduced policies to encourage financial services to the real economy, guide financial institutions to innovate financial products, and broaden financing channels for small and medium-sized enterprises. However, in practice, financial institutions lack effective means to identify the advantages and disadvantages of enterprises and improve risk control capabilities, resulting in lackluster financial innovation.
What to do? This can only be done with the use of technical means. There's a joke that the most cutting-edge technology used by Chinese investors is Excel. This cannot but be said to be a "funny and ironic landscape" in the real investment scenario where the investment community is shouting to invest in high-tech and hard technology.
At present, ChatGPT has been born, which has also triggered a new round of explosion of AI technology. The governments of developed countries such as the United States and Europe have expressed their position that they must be fully prepared and take advantage of the huge potential of AI technology. The Chinese government has also issued relevant policies to actively support the development of AI technology, especially the innovative application of AI.
Undoubtedly, AIGC is the latest and greatest innovative application. Some institutions predict that by 2032, the total revenue of the AIGC market will grow from $40 billion last year to $1.3 trillion, and it is expected to increase 32 times in 10 years.
Obviously, with the deepening of the concept of AIGC and the continuous breakthrough of technology, AIGC technology will also be more widely used in the capital market.
It is foreseeable that more, better and more suitable for the capital market "little Vs" will definitely step on the beat of the artificial intelligence era. Zhang Xinghui firmly believes that "it is very likely that an AI technology revolution will break out in China's capital market."
This AI technology revolution will not only force the capital market itself to use more AI technology, but also bring revolutionary changes to all aspects of human society.