China's Economy in the Annual Report丨EZVIZ Network: "Ramps" in the Slow Era of Home Furnishing

21st Century Business Herald reporter Weng Rongtao reported from Guangzhou

In the context of the slow growth cycle of the home appliance industry and only achieving overall slight growth last year, Hangzhou EZVIZ Network Co., Ltd. (hereinafter referred to as "EZVIZ Network", 688475. SH) achieved a good result of 68% increase in net profit.

EZVIZ Network is operated by Hikvision (002415. SZ) spin-off and listing, mainly for the smart home scene, backed by the technical advantages of the major shareholder as a security monitoring leader, with smart cameras as the "starting business", the market share ranks in the forefront of the industry, and is considered to be the "specialty" of the smart home industry.

Forced by the pressure of the single structure of the smart home camera business, EZVIZ Network has begun to look for a new growth track since 2022, on the one hand, it has extended its layout from the camera business to other smart home product businesses, such as smart door locks, smart doorbells, etc., and on the other hand, it has extended to software services through hardware products to provide IoT cloud platform services.

The 21st Century Business Herald reporter combed and found that the main increase in EZVIZ Network's profits last year came from the intelligent home business known as the second growth curve and the Internet of Things cloud platform business, in addition, the company also focused on betting on AI large models and intelligent service robot tracks, this forward-looking layout is worth paying attention to.

AI breakthrough in the post-real estate era

According to the data of the National Bureau of Statistics, the total retail sales of consumer goods in 2023 will increase by 7.2% over the previous year, but the total amount of furniture will only increase by 2.8% year-on-year, which is significantly lower than the growth rate of the total number of social zeros;

This means that China's home appliance market has entered a slow growth cycle.

The low-speed growth of household appliances is mainly related to the sluggish sales of the new housing market in the real estate industry, and the prosperity of the household appliances and home furnishing industry in the past largely depends on the new housing decoration market, and now the development logic of the industry is gradually shifting from increment to stock housing market.

Therefore, smart home is regarded as an important breakthrough in the post-real estate era. For example, the home appliance leader Midea Group (000333. SZ) in the C-end business, in recent years, one of the main countermeasures is to make intelligent and high-end upgrades to home appliances 002572; SZ) is also launching smart home products such as electric curtains.

As a new entrant in the smart home industry, EZVIZ Network has been able to achieve performance growth in a relatively sluggish industry situation, one of the main reasons is that it continues to expand its business development boundaries.

During the reporting period, EZVIZ Network achieved a total operating income of 4.840 billion yuan, a year-on-year increase of 12.39%, and a net profit attributable to shareholders of listed companies of 563 million yuan, a year-on-year increase of 68.80%.

The 21st Century Business Herald reporter found that the company's performance in 2023 will grow significantly, in addition to benefiting from the decline in raw material costs, the increase in the proportion of Internet of Things cloud platform business and overseas business has become the main driving force for performance growth.

According to EZVIZ Network, in 2023, its traditional main business smart camera revenue will only increase slightly by 3% year-on-year, but the revenue of smart home business will increase by 49% year-on-year, and the proportion of revenue in total revenue will increase from less than 8% to 11%, and the revenue of IoT cloud platform business will increase by 27.79% year-on-year.

It is understood that EZVIZ Network will release a dual-camera video face lock in 2023, and a three-camera video face lock in 2024, superimposing palm vein unlocking recognition and other algorithm technologies, and continuously enriching product functions and user experience through new scene applications such as package detection and identification, child exit recognition, and fall detection and recognition.

The smart home sector is built into a modular system to realize the interaction with vehicles, gates, courtyards, etc., which is the development goal of EZVIZ Network, hoping to drive the overall development of the smart home category.

The relevant person in charge of EZVIZ Network said, "The smart home business still has a lot of room for growth in both domestic and foreign markets, and the company plans to continue to enrich the product line of smart home and provide customized solutions for different types of residential and office scenarios." ”

In addition to the smart home business, the Internet of Things cloud platform business has also maintained rapid growth, and the EZVIZ cloud platform includes the "EZVIZ Cloud Video" APP for consumer users and the "EZVIZ Open Platform" for industry users. The cloud platform is a revenue model for subscriptions and renewals, which also means that growth is largely dependent on user scale. By the end of 2023, more than 250 million devices will be connected on the EZVIZ IoT cloud platform, including more than 200 million video devices.

For C-end consumers, the "EZVIZ Cloud Video" application provides intelligent services around the space of life and work scenes, including real-time video preview, video cloud storage, historical image playback, etc.; for B-end developer customers, EZVIZ Cloud provides equipment access and operation and maintenance guarantee for equipment manufacturers, forms a full-stack open PaaS platform service, and provides APIs, SDKs, aPaaS components, intelligent algorithms and other technical tools for third-party software developers and system integrators.

It can be seen that although the main revenue of EZVIZ Network still depends on the sales of hardware products, it is also striving to increase the proportion of cloud platform business in total revenue, and the latter has become one of the more imaginative segments because of its high gross profit margin.

Large models, new directions for robots

In 2023, EZVIZ Network's R&D investment will be 731 million yuan, an increase of 21.18% over the same period of the previous year, and the company plans to invest 150 million yuan in R&D of AGI intelligent service upgrades, and 60 million yuan in the development of intelligent visual sweeping and mopping robots.

AGI intelligent services are mainly used in IoT cloud platforms.

The relevant person in charge of EZVIZ Network said at the results conference, "The growth rate of the company's cloud storage has declined relatively, and the cloud business itself needs to continue to innovate and develop AGI large model services, hoping to have more value-added services to provide services for C-end users." ”

In terms of intelligent service robots, EZVIZ Network has released cleaning robots and companion robots in the C-end field, and commercial cleaning robots in the B-end field. Specific products include EZVIZ AI intelligent sweeping and mopping treasure RS20, AI sweeping and mopping all-in-one machine RS2, EZVIZ home assistant robot RK3, cloud vision commercial cleaning robot BS1 and other products.

Compared with humanoid robots, EZVIZ Network is more optimistic about the development prospects of cleaning robots.

The management of EZVIZ Network said, "The application scenarios of humanoid robots are still a bit vague, and humanoid robots seem to be able to do anything, but there are still many gaps compared with humans." However, cleaning robots already have very clear application scenarios, such as plane-floor cleaning, façade-desktop cleaning, and the next step is likely to be fused with the robotic arm, and we will continue to develop in this direction. ”

Compared with other robot products on the market, EZVIZ Network's commercial cleaning robot not only has cleaning capabilities and intelligent operation experience, but also integrates security inspection technology, which can perform full-scene video inspections and assist in finding lost people in high-traffic scenarios.

Lv Wei, an analyst in the computer industry of Minsheng Securities, believes that "the cleaning robot of EZVIZ Network with pure vision as the technical path will no longer be limited to the scope of ground cleaning, and even no longer limited to cleaning functions." Hikvision's own large office building area is expected to be the first to try EZVIZ commercial cleaning robots, thereby contributing revenue. ”

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