Summary: Gross profit margin exceeds 50% (welcome to pay attention to girlfriend finance)
Written by Sister Mi
This is the 1452nd original article of @girlfriend finance
iFLYTEK, the "first AI stock", has made new progress in the spin-off of the medical sector business and listing.
On January 26, the official website of the Hong Kong Stock Exchange disclosed the prospectus documents of iFLYTEK Medical Technology Co., Ltd. (hereinafter referred to as "iFLYTEK Medical").
According to the iFLYTEK medical prospectus, its revenue scale will rank first in China's medical artificial intelligence industry in 2022.
Last year, ChatGPT exploded in popularity, and it also brought the concept of AI to life. The concept of artificial intelligence has advanced all the way in the capital market. Whether the story of AI+ medical care will continue to be the focus of attention this year, the answer may be found in iFLYTEK Medical.
01
From the perspective of industry, the market size growth potential of the medical artificial intelligence industry in mainland China is large.
According to the Frost & Sullivan report, the market size of China's medical artificial intelligence industry increased from 1.8 billion yuan to 6.8 billion yuan from 2018 to 2022, with a compound annual growth rate of 39.1%, and is expected to increase to 311 billion yuan from 2022 to 2032, with a compound annual growth rate of 46.6%.
Among them, the market size of artificial intelligence in medical institutions is expected to be the largest area of rapid growth, with a compound annual growth rate of 36.5% from 2018 to 2022, and it is expected that its market size will increase from 5.2 billion yuan to 227.9 billion yuan from 2022 to 2032, with a compound annual growth rate of 45.8%.
In the medical AI industry, AI technology is mainly used to: support primary medical institutions, hospitals, patients and regional management institutions.
Among them, the application scenarios of AI in medical institutions mainly involve primary medical institutions and hospitals (as shown in the figure below).
It includes the application of artificial intelligence in regional medical platforms and primary medical institutions, as well as improving doctors' medical capabilities (such as AI case quality control, AI medical imaging software, etc.), and strengthening hospital operations (such as hospital AI chronic disease management, artificial intelligence guidance system, artificial intelligence case collection, etc.).
From the perspective of the current situation of the industry, the medical artificial intelligence industry in mainland China is highly fragmented and highly competitive.
Taking 2022 as an example, iFLYTEK Medical claims to be the leader in the market size of major artificial intelligence companies in the healthcare institution industry, with an actual revenue scale of only about 455 million yuan and a market share of about 8.7%.
Among comparable companies, the top 5 companies together account for less than 30% of the market share.
On the one hand, it means that there is still a great opportunity for companies to strive for a larger market share in the future, and on the other hand, it also means that the first-mover advantage of the existing head enterprises is not strong, and it is very likely that the latecomers will prevail.
02
Previously, Sister Mi of the IPO had paid attention to the shareholding structure of iFLYTEK Medical, as well as the background of its parent company iFLYTEK's spin-off of iFLYTEK Medical (see: Over 90 billion giants spin off and go public!iFLYTEK tells the story of "AI + medical" again).
Today, let's focus on the business and success of iFLYTEK Medical.
In terms of business, as shown in the figure below, iFLYTEK Medical mainly empowers major players in the medical industry (including management institutions, hospitals, medical institutions, doctors, patients, etc.) through the iFLYTEK Xinghuo medical model.
To put it simply, it is to provide better medical services to patients and residents by serving and assisting primary care institutions, hospitals and doctors. It involves the whole medical process of health risk early warning, early screening, diagnosis, follow-up of treatment and rehabilitation effects, post-diagnosis management, and chronic disease management.
According to the prospectus, iFLYTEK Medical provides products and services to about 52,000 primary medical institutions, covering more than 400 districts and counties in more than 30 provinces, as well as more than 400 hospitals.
In terms of income composition, it is more intuitive.
iFLYTEK Medical's revenue mainly comes from the following four parts:
- The services of primary medical institutions account for half of their total income.
From 2021 to 2022 and the first three quarters of 2023, the revenue of this part will be about 216 million yuan, 298 million yuan and 166 million yuan, accounting for 57.9%, 63.2% and 51.1% of the total revenue in the same period, respectively.
- Hospital services, the proportion of revenue fluctuated greatly, with 22.1%, 9.2% and 11.6% respectively during the reporting period.
- Patient services, which accounted for 19.3% of revenue, increased from less than 9% in the previous quarter to 19.3% in the first three quarters of 2023.
- Regional management platform solutions, accounting for 11.3%-19.8% of revenue.
03
Let's take a look at the performance of iFLYTEK Medical.
According to the prospectus, from 2021 to 2022 and the first three quarters of 2023, its revenue will be 373 million yuan, 472 million yuan and 324 million yuan respectively, of which the revenue in 2021 will increase by about 26.7% and the revenue in the first three quarters of 2022 will increase by about 29%.
In the same period, its gross profit was 188 million yuan, 231 million yuan and 179 million yuan respectively, which also continued to grow.
Although its gross profit margin fluctuated during the period, its overall performance was good, at around 50%. Especially in the first three quarters of 2023, its gross profit margin reached 55.2%.
Interestingly, from 2021 to 2022 and in the first three quarters of 2023, iFLYTEK's net loss ratio is expanding, with -24%, -44.2% and -52.4% respectively.
In the same period, it lost 89 million yuan, 209 million yuan and 170 million yuan respectively, with a cumulative loss of about 468 million yuan.
However, iFLYTEK is still increasing its R&D expenditure, investing about 160 million yuan, 242 million yuan and 196 million yuan respectively in the same period, accounting for 42.9%, 51.2% and 60.3% of the revenue of each period, respectively.
The prospectus explained that its R&D expenditure increased by 11.3% in the first three quarters of 2023, mainly due to two factors.
First, the outsourcing service fee increased due to the increase in the outsourcing of non-core R&D work to iFLYTEK and other third parties, and second, the amortization of intangible assets related to R&D activities.
It is worth noting that as of September 30, 2023, iFLYTEK Medical recorded net current liabilities of 109 million yuan, and the cash and cash equivalents at the end of the period were only 57.699 million.
In addition, among the risks disclosed in the prospectus, iFLYTEK admitted that it "faces the credit risk of receivables".
As of the end of 2021, 2022 and September 30, 2023, its accounts receivable (net of provisions) amounted to 162 million yuan, 274 million yuan and 403 million yuan, respectively.
From the perspective of revenue composition, iFLYTEK Medical is still more dependent on large customers, and its revenue from 5 customers accounted for 56.4%, 50.3% and 43.9% of its revenue in the same period respectively.
As a result, while its business is expanding, it is currently facing cash flow pressure and an increase in accounts receivable.
The data not indicated in this article are all from the financial reports of listed companies, and the article is only for discussion and analysis, and does not constitute investment advice.
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