Mobvoi, a generative AI company, is about to be listed on the Hong Kong stock market. On April 16, Mobvoi Co., Ltd. (hereinafter referred to as "Mobvoi") officially launched its IPO, which ended on the 19th, and plans to be listed on the main board of the Hong Kong Stock Exchange on April 24 with the stock code "2438". According to the information disclosed in the prospectus, Mobvoi is expected to raise a net amount of HK$275 million (about RMB 249 million) in this IPO, and if it is successfully listed, Mobvoi will become the "first AIGC stock" in Hong Kong stocks.
However, compared with other players on the AI large model track, it can be seen that Mobvoi is far behind listed companies such as Baidu and iFLYTEK in terms of R&D investment and revenue scale, and it is also inferior to the "new AI four tigers" companies such as Zhipu, Dark Side of the Moon, MiniMax and Baichuan Intelligence in terms of financing ability.
Judging from the performance disclosed in the prospectus, the "main force" of Mobvoi's revenue in 2023 has shifted from hardware to software, and AI software solutions (including AIGC and AI enterprise solutions) account for nearly 70% of the total revenue. However, due to the end of the cooperation with Volkswagen, the revenue of Mobvoi AI enterprise solutions declined, and the gross profit margin also fell slightly.
It is expected to raise 250 million yuan, more than half of which will be used for AI research and development
On April 16, the Hong Kong Stock Exchange announced that Mobvoi intends to offer 84.568 million shares globally through the Hong Kong IPO (depending on whether the over-allotment option is exercised or not), of which 8.457 million shares are offered in Hong Kong and 76.111 million shares are offered internationally, and the IPO ends on the 19th, and the expected pricing date is April 22. Then, Mobvoi plans to be officially listed on the main board of the Hong Kong Stock Exchange on April 24 with the stock code "2438".
The prospectus disclosed that Mobvoi's offer price range was HK$3.7 to HK$4.1 per share (about RMB 3.35 to RMB 3.72 at the current exchange rate). Based on the median offer price of HK$3.9 per share (about RMB 3.53), it is expected to raise net funds of HK$275 million (about RMB 249 million). According to the highest issue price of HK$4.1 per share, Mobvoi's valuation after listing will be HK$6.115 billion (about RMB 55.42).
More than half of the funds raised by Mobvoi will be used for AI-related R&D investment. Specifically, 44.3% will be used to continuously improve modeling technology for model training, 35.7% will be used for solution development and marketing in the next three years, of which 6.4% will be used for AIGC solutions. The remaining 10% will be used to pursue strategic alliances, investments and acquisitions, as well as to implement long-term growth strategies for solution development over the next three years, and the remaining 10% will be used for working capital and general corporate purposes.
In recent years, Mobvoi has increased slightly in R&D investment, and the prospectus data shows that from 2021 to 2023, its R&D expenditure will be 91 million yuan, 119 million yuan and 155 million yuan respectively, accounting for 22.9%, 23.8% and 30.6% of revenue. Mobvoi said that this is mainly due to the increase in the number of R&D intelligent employees related to AI solutions and the increase in technical service fees related to the development of large models, which is also consistent with Mobvoi's ability strategy of enriching the solution matrix and optimizing the multi-model generation capability of the large model "sequence monkey".
However, there are many "players" in the AI large model track, and compared with listed companies in the same track, Mobvoi's investment in research and development is still low. Taking Baidu as an example, the financial report shows that Baidu's R&D expenses for the whole year of 2023 will be 24.2 billion yuan, accounting for about 18% of revenue, and its annual R&D investment is 156 times that of Mobvoi. In addition, iFLYTEK, which also focuses on "language interaction" technology, will spend 2.498 billion yuan on R&D in the first three quarters of 2023, accounting for about 20% of revenue.
Compared with other AI large-scale model startups, Mobvoi is also facing fierce competition. Among them, four companies, Zhipu, Dark Side of the Moon, MiniMax and Baichuan Intelligence, have received frequent financing this year, with valuations quickly exceeding 10 billion yuan, and are known as the "New AI Four Tigers" in the era of generative AI.
At the beginning of this year, Zhipu AI completed a new round of financing, and previously announced that it would receive a total of more than 2.5 billion yuan in financing in 2023. In February 2024, the Dark Side of the Moon announced the completion of a Series B financing of more than $1 billion, with investors including Alibaba, Meituan, Xiaohongshu and Sequoia China. In April 2024, the media broke the news that Alibaba led the investment in MiniMax, a large-scale model company, with an investment of up to $600 million, and this round of financing may make MiniMax more than $2.5 billion valuation. On April 15, 2024, Baichuan Intelligent disclosed a new round of financing of hundreds of millions of US dollars, and the valuation of Baichuan Intelligent has exceeded 1.8 billion US dollars since the beginning of this year.
Last year, revenue increased slightly by 1.4%, and AIGC users paid an average of 248 yuan/year
Mobvoi was founded in 2012, and according to the prospectus, it mainly focuses on generative AI and voice interaction technology, providing AI software solutions and smart devices and accessories. Before 2022, Mobvoi's revenue mainly came from hardware revenue based on smart devices and accessories, but in recent years, AI software solutions have become the "main force" of Mobvoi's revenue.
Judging from the performance announced in the prospectus, from 2021 to 2023, Mobvoi's revenue will be 398 million yuan, 500 million yuan and 507 million yuan respectively, and the revenue growth in 2023 will be only 1.4%.
By business, Mobvoi's revenue is mainly composed of AI software and AIoT hardware. Among them, the revenue from AI software solutions has grown rapidly, from 60 million yuan in 2021 to 343 million yuan in 2023, and the corresponding revenue proportion has increased from 15% in 2021 to 67.7% in 2023. The proportion of revenue from smart devices and other accessories will decrease from 85% in 2021 to 32.3% in 2023.
AI software solutions mainly include AI-generated content (AIGC) solutions and AI enterprise solutions. According to the prospectus, Mobvoi's AIGC business revenue from 2021 to 2023 will be 70 million yuan, 40 million yuan and 118 million yuan respectively, accounting for 23.2% from 1.7% to maintain continuous growth. From 2021 to 2023, the number of paying users on Mobvoi has increased from 63,000 to 410,000, and the average income of a single paying user has increased from 104 yuan to 248 yuan.
It is reported that Mobvoi developed a general large model UCLAI in 2020, and then in 2023, it will launch an upgraded version of "Sequence Monkey" on the basis of the former, officially entering the large model track. At present, for content creators, the company has established an AIGC solution matrix, including the AI dubbing assistant "Magic Sound Workshop", the AI writing assistant "Magic Writing" and "Wonderful Text", the AI digital human "Wonderful Yuan" and the integrated solution "DupDub". In addition, recently, Mobvoi has two AIGC products, "Words and Paintings" and "Yuanchuang Island", which are in the testing stage.
In terms of AI enterprise solutions, Mobvoi is mainly aimed at B-end customers, tailoring AI software solutions for enterprises in the automotive, financial, TMT and other industries (such as healthcare and retail) to generate revenue. Mobvoi's AI enterprise solution revenue from 2021 to 2023 will be 53 million yuan, 263 million yuan and 226 million yuan respectively. As for the slight decrease in income, Mobvoi said that it was due to the decrease in income from the intellectual property arrangement with "automobile subsidiary A". It is reported that the "automobile subsidiary A" is a subsidiary of "Volkswagen", and in September 2022, Volkswagen has withdrawn from the list of shareholders of Mobvoi.
Last year's adjusted net profit fell by 83.5%, and the company actively explored new automotive customers
"You don't need external financing to support R&D investment," Mobvoi CEO Li Zhifei said in an interview with the media last year.
As we all know, the R&D and training of large AI models require huge capital investment, and in the five years since 2019, Mobvoi has not made public financing news. According to the prospectus, Mobvoi received a total of 7 rounds of financing from February 2013 to September 2019, with a cumulative financing amount of more than 255 million US dollars, and its investors include Sequoia Capital, Google, Haina Asia Venture Capital Fund (SIG), Zhen Fund, Gome Optics, Goertek and so on.
Mobvoi is in the midst of a "100-model war" and is in urgent need of replenishing cash flow. According to the prospectus data, as of the end of 2023, Mobvoi's cash and cash equivalents are only 144 million yuan, and the current assets are 396 million yuan, but the current liabilities are as high as 4.517 billion yuan, and the net current liabilities are 4.121 billion yuan.
On the other hand, Mobvoi has been losing money in the past three years. According to the prospectus, from 2021 to 2023, the losses from continuing operations will be 182 million yuan, 685 million yuan and 803 million yuan respectively. After adjusting the net profit (after deducting factors such as changes in the book value of contingent redeemable preferred shares and common shares), the net profit achieved a turnaround of 109 million yuan in 2022, but the profit in 2023 fell to 18 million yuan, a decrease of 83.5%.
From the perspective of gross profit, from 2021 to 2023, Mobvoi's gross profit will be 149 million yuan, 336 million yuan and 326 million yuan respectively, and the gross profit margin will be 37.5%, 67.2% and 64.3% respectively. According to the prospectus, previously, the gross profit margin grew rapidly due to the intellectual property arrangement with Volkswagen and the growth of AIGC business revenue. However, Mobvoi's cooperation with Volkswagen has ended, and the gross profit margin in 2023 has also decreased slightly. According to public information, after becoming a shareholder in December 2021, Volkswagen continued to invest in Mobvoi, with a cumulative investment of more than $150 million. Volkswagen has also become Mobvoi's largest customer from 2022 to 2023, contributing more than 40% of Mobvoi's revenue.
It is worth mentioning that the prospectus mentions that the end of the cooperation project with Volkswagen has opened up opportunities for Mobvoi to cooperate with other companies in the automotive industry. At present, Mobvoi is looking for cooperation with new car company customers. According to the prospectus, after the end of the intellectual property related arrangement with Volkswagen, Mobvoi has signed an intellectual property arrangement with a new automobile customer in January 2023, and signed other contracts at the end of the same year, with an amount of 1.2 million yuan, and is expected to basically complete the contract this year.
Mobvoi said that the partnership with new car customers is still in the early stage, and it is expected that by the end of 2024, the gross profit margin with the new partner will be inferior to the gross profit margin achieved by the previous car project. At the same time, it is expected that the revenue, gross profit and gross profit margin of AI enterprise solutions will decline in 2024.
Written by: Nandu reporter Ma Ningning and intern Zhu Kexuan