Although the IPO fundraising volume of the Hong Kong Stock Exchange in the first half of the year fell out of the top three positions in the world, ranking sixth in the world, from the current number of queuing companies that passed the hearing, there are a total of 106, and the Hong Kong Stock Exchange in the second half of the year is still lively.
Statistics from the Securities Times reporter found that among the 106 companies lined up for listing, 28 companies involved in AI, artificial intelligence or digitalization, accounting for 26%. Among these 28 companies, 19 have a loss in net profit as of 2022, 7 have achieved a slight profit with a net profit of less than 100 million yuan, and 2 have a net profit of more than 1 billion yuan, showing a general loss state.
"At present, the development of the AI industry has entered a deep water area, and if these companies do not go public to raise funds to replenish ammunition, they are likely to face a situation of depletion of funds and limited development." In addition, the artificial intelligence track was previously hot, and the valuation of capital pursuit skyrocketed, and the investment institutions behind this also had pressure to exit. Bank of Australia Capital Chairman Xiong Gang told reporters.
Artificial intelligence companies went public in Hong Kong in a flock, and generally lost money
Artificial intelligence, the "synonym" of cutting-edge technology, "fired" from the primary market to the secondary market in the first half of this year, and the smell of "AI" was everywhere.
According to reporter statistics, since the beginning of this year, as many as 28 AI companies, such as AI intelligent driving chip company "Black Sesame Intelligence", AI voice company "Yunzhisheng", generative AI company "Ask the Door", AI robot "UBTECH", interactive AI "Songtong Technology", and AI recommendation function "Yisou Technology", have intensively submitted listing applications to the Hong Kong Stock Exchange, and all have passed the hearing and queued up for listing.
Wind data shows that there are currently 106 companies waiting to be listed through the hearing, and 28 companies involving AI, artificial intelligence or digitalization. In other words, AI-related companies accounted for 26% of the total. The reporter analyzed the data and found that 18 of the 28 companies to be listed were losses, and 3 had losses of more than 1 billion yuan, namely Black Sesame Intelligent (-2.754 billion yuan), Sagitar Juchuang (-2.089 billion yuan), and Fourth Paradigm (-1.645 billion yuan), 8 of which achieved micro-profits, and only 2 of which made profits of more than 1 billion yuan.
(Note: Yisou Technology, Dida Travel, UBTECH operating income and net profit are all in the third quarter of 2022)
It can be seen that behind the collective listing of AI companies in Hong Kong, the profits are generally poor and they have been losing money for a long time.
In addition, these AI companies involved in AI concepts generally have a strained cash flow, which is fatal for a R&D-heavy industry, but it also shows why these companies are rushing to list in Hong Kong.
For example, according to the prospectus of Black Sesame Intelligence, from 2020 to 2022, the company's book cash was 244 million yuan, 1.555 billion yuan and 982 million yuan, respectively, as of the end of April 2023, the book cash was 883 million yuan, and the company's R&D expenditure increased from 255 million yuan in 2020 to 595 million yuan in 2021 and 764 million yuan in 2022. With the continuous investment in follow-up research and development, the company's current book cash flow is very tight.
Xiong Gang, chairman of Bank of Australia Capital, said in an interview with the Securities Times reporter, "In the current situation of difficult fundraising in the primary market, the cash flow of enterprises is not ideal, and financing through listing is a normal business consideration, but it depends on whether the secondary market pays." However, Hong Kong's secondary market is still relatively cautious about science and technology enterprises, and financing is difficult. But the logic of financing is that there is no product that cannot be sold, only a price that cannot be sold. This involves another question, that is, the investment institutions behind may have differences, such as whether the institutions that enter later will have valuation inversions? These are all issues to consider. ”
The game between inflated valuation and commercialization
Behind the widespread "bleeding" listing of these AI intelligent companies is the valuation touted by capital, their valuation can skyrocket hundreds of times in a few years, and there are also star venture capital institutions behind them, including Sequoia China, Tencent, Northern Light Venture Capital, etc.
On May 30, Hong Kong Stock Exchange documents showed that the artificial intelligence company "Mobvoi", founded by former Google natural language scientist Li Zhifei, submitted a prospectus. According to the prospectus document, Mobvoi was founded in 2012 and received millions of yuan in angel round financing from ZhenFund in the year of its establishment. Since then, Sequoia China and Haina Asia have increased their weight, and the company has successively completed A and B round financing. In 2015, Mobvoi received an infusion from Google, one of Google's few investments.
After completing the Series C financing, Mobvoi was valued at $300 million. Two years later, Mobvoi received $180 million in Series D financing from Volkswagen and established a joint venture company with 50% stake each. Since then, Mobvoi has been valued at more than $700 million.
From the investment and financing list, it can be seen that the post-investment valuation of Mobvoi increased from 5.1 million US dollars in February 2013 to 757 million US dollars in September 2019, and the valuation has increased 150 times in just six years.
This myth of wealth creation also appears in another company, "Black Sesame Intelligence". The Securities Times reporter sorted out the financing history of Black Sesame Intelligent in detail, the company was established in July 2016, and quickly obtained the investment of Northern Light Venture Capital in September of that year, SAIC Group and China Merchants Group in March 2019, Haisong Capital in September 2020, Tencent, Bosch Group and Dongfeng Motor Group in April 2021, Xiaomi in September, and NIO Capital and Geely Holding in January 2022.
The company has conducted a total of 10 rounds of financing, with a total financing amount equivalent to about 5.2 billion yuan. From the perspective of financing rounds, the valuation of Black Sesame Smart has risen by more than 122 times in 7 years, from the initial 127 million yuan to the last round of 15.5 billion yuan, which can be called a rocket.
In fact, artificial intelligence has been questioned by the market for a period of time due to problems such as high valuation and unclear landing scenarios. Xiong Gang told reporters, "Valuation and commercial value is an eternal game, the valuation of more than 10 billion yuan may be established in a certain period of time, but after this time node, it will not be established." In fact, it is the investment institutions that underestimate the difficulty of technological evolution and overestimate the future business value, which is the creation of valuation bubbles. Is it technically achievable to spawn a project with a valuation of tens of billions in 5 years? Even if it is realized, the commercial value of the resulting product may be greatly reduced, because substitutes and competitors appear on a large scale. ”
Xiong Gang believes that AI artificial intelligence has great prospects for future development, but it faces the characteristics of "difficult landing" of technology. Business model and monetization ability are the main bottlenecks in the development of the AI industry. From an algorithmic point of view, the AI industry has not achieved huge technological breakthroughs; The actual combat landing scenarios are scattered and the degree of product standardization is low; Intellectual property and ethical issues are also important causes of bottlenecks in the development of the industry. Finding the right scenario is the key to the commercialization of AI.
AI artificial intelligence capital feast, financing more than 100 billion yuan in half a year
In the first half of 2023, ChatGPT detonated a new wave of artificial intelligence, from the technical shock brought by the continuous iteration of OpenAI's GPT model, to the rapid influx of domestic and foreign technology giants into the "thousand model war", to push the king of AI computing power, NVIDIA, to the peak of trillion market value, as if AIGC became the "absolute top" of the technology industry overnight.
At the same time, AIGC startups have entered a new round of "gold absorption" craze. The reporter interviewed a number of venture capitalists, all of whom said that they have made a layout in related fields. According to Jingzhi East-West data, in the first half of this year alone, there were 51 enterprise financings involving generative AI large models and their landing applications, with an investment and financing amount of more than 100 billion yuan, of which 18 were single billion yuan financing.
According to a survey by a research institution, in 2022, a total of 78 financings occurred in the AIGC track, with a financing amount of US$1.37 billion, or about RMB 9.6 billion. This means that in the first half of 2023 alone, the amount raised at the AIGC track has exceeded ten times that of the whole of last year.
Recently, Tianyancha released an analysis of the investment and financing of the artificial intelligence industry in the first half of 2023. From the perspective of industry distribution, the number of financing events of cutting-edge technologies, robots and integrated circuits ranks first, and autonomous driving also has 20 related financing events after these three.
Responsible editor: Yue Yanan
Proofreader: Wang Jincheng