The opening is broken, and the imagination of AIGC is unpredictable

It ended with more than 100 times subscription, but Mobvoi opened down more than 21%. On April 24, Mobvoi was listed on the Hong Kong Stock Exchange, with an opening price of HK$2.98 down 21.6% from the issue price of HK$3.8, and a total market capitalization of HK$5.489 billion on the day based on the stock price of HK$3.68 at the close.

Founded in 2012, with generative AI and voice interaction technology as its core, Mobvoi is one of the few profitable AI companies in China. Since 2020, Mobvoi's main revenue has changed from hardware to software solutions, ranking third in China's AI speech technology and natural language processing software solutions in terms of revenue in 2022, with a market share of 1.4%. The popular AIGC (Artificial Intelligence Generated Content) concept has made Mobvoi turn around quickly, but it has also brought more competitors, higher R&D pressure and customer acquisition costs.

The total market capitalization is HK$5.489 billion

The public offering was subscribed 117.39 times, and the international offering was subscribed 1.58 times, "Mobvoi performed well during the subscription period, and the performance of the subscription depended on the enterprise control quota on the one hand, and the scarcity was expensive, and on the other hand, it relied on the institution to 'carry the sedan chair'", Wang Chao, founder of Wenyuan Think Tank, told a reporter from Beijing Business Daily, "The main thing is to look at the performance after the listing, which is a relatively fair market price." ”

On April 24, Mobvoi went to the Hong Kong Stock Exchange to be listed, opening at a price of HK$2.98, although the stock price opened low and went high throughout the day, compared with the issue price of HK$3.8, it was still a break. Based on the stock price of HK$3.68 at the close, Mobvoi has a total market capitalization of HK$5.489 billion.

Mobvoi doesn't seem to care about the stock price. "Hello, ask" "Hello, 02438. HK", at 9:30 on April 24, Mobvoi posted on the official public account with the listing point in the card, "Mobvoi is the first share of Hong Kong AIGC".

In 2012, Li Zhifei resigned from Google to found Mobvoi, and his thinking on AI cognition during his doctorate and Microsoft's latest paper on AGI (Artificial General Intelligence) made him an "AGI believer".

"Technology followers believe because they see, and technology innovators see because they believe. In the future, we will continue to uphold the spirit of a pioneer, continue to practice our belief in scientific and technological innovation, and create long-term social value that is truly sustainable and sustainable. As CEO, Li Zhifei said at the listing ceremony that Mobvoi is a long-term practitioner of this spirit and a pragmatic person on the AIGC track.

According to Mobvoi's plan, the funds raised will be used to expand the scale of the multi-modal large model "Sequence Monkey" in the next three years, 35.7% will be used for solution development and market expansion in the next three years, 10% will be used to seek strategic cooperation, investment and acquisition, and implement long-term growth strategies for solution development in the next three years, and the remaining 10% will be used for working capital and general corporate purposes.

Profitable, but gross margin will decline

Due to the large R&D investment and the lack of commercialization, AI companies are generally in a loss-making state.

According to the prospectus, from 2020 to 2021, Mobvoi's revenue will be 265 million yuan and 398 million yuan respectively, and the adjusted net loss will be 157 million yuan and 73.439 million yuan respectively. In 2022, Mobvoi will turn around its losses, with revenue of 500 million yuan and adjusted net profit of 109 million yuan. In the first half of 2023, the revenue was 262 million yuan, a year-on-year decrease of 23.7%, and the adjusted net profit was 65.086 million yuan, a year-on-year decrease of 63.3%.

Back in 2022, Mobvoi's gross profit margin increased from 37.5% in 2021 to 67.2%. From 2020 to 2021, smart devices and other accessories contributed more than eighty percent of Menbvoi's revenue, and from 2022 onwards, the majority of revenue has become AI software solutions, with revenue of 303 million yuan, accounting for 60.6% of total revenue, and gross profit margin of 93.8%.

To be more specific, Mobvoi's AI software solution segment consists of AIGC solutions and AI enterprise solutions. AIGC solutions for content creators include AI voice-over assistant Magic Workshop, AI writing assistant Magic Writer, AI digital human Wonder Yuan, and services for enterprises include AI voice interaction solutions and intelligent customer service solutions.

In the first half of 2023, the revenue share of AIGC solutions increased from 4.4% in the first half of 2022 to 15.8% in the first half of 2023. AI enterprise solutions contributed 62.1% of Mobvoi's revenue in the first half of 2023, and its gross profit margin of 92.1% was also the highest among all businesses.

However, Mobvoi said, "Given that our intellectual property arrangement with an automotive subsidiary was completed in June 2023, our overall gross profit margin is expected to decline." In order to improve gross profit margin, our smart devices will focus on overseas markets with high product recognition and launch flagship products with higher gross profit margins. We will consider direct costs when determining the pricing of AIGC solutions and AI enterprise solutions, allowing us to control and maintain gross profit levels. ”

The cost of customer acquisition for paying users is 2.6 times higher

Revenue depends on AI enterprise solutions, and AIGC solutions are more easily perceived by users and investors.

According to data cited by Mobvoi, China's AIGC market is relatively fragmented, with the top five market players accounting for about 13.8% of revenue. Mobvoi's AIGC solution revenue in 2022 accounted for about 9% of China's AIGC market share.

In the first half of 2023, Mobvoi AIGC solution will have about 162,000 paying users, with an average revenue of 219 yuan per paying user, but the average acquisition cost per paying user, that is, the average cost of acquiring a paying user, will be about 111 yuan. However, in the first half of 2022, the average acquisition cost per paying user was 30.7 yuan, which means that the customer acquisition cost was 2.6 times higher in one year.

Mobvoi mentioned that "sales and marketing expenses increased from 42.8 million yuan in the first half of 2022 to 59.9 million yuan in the first half of 2023, mainly due to the increase in channel expenses due to the higher conversion rate of paying users and the average customer acquisition cost per paying user in the first half of 2023, and the increase in user traffic on our AIGC platform."

Wang Qinglin, manager of Ruidaheng Research Institute, believes that R&D investment is the most important thing to pay attention to Mobvoi, "higher R&D investment will affect the profitability of enterprises, and although embracing AI is a general trend, the market recognition of R&D results needs to be tested."

In the first half of 2023, Mobvoi's R&D expenditure increased to 72.6 million yuan from 52.2 million yuan in the same period last year. Compared with large technology companies, the increase in tens of millions of yuan in investment expenditure is not remarkable, considering the small size of Mobvoi and the large number of competitors, it is unknown whether it will be able to maintain profitability in the future.

In an exchange with a reporter from Beijing Business Daily, Chen Chen, a research partner at Analysys, said, "Under the wave of AI technology, both core needs, landing scenarios and business models are changing, and enterprises need to find new growth engines. Mobvoi's core business strategy has been adjusted in recent years, which is a natural choice for enterprises to respond to market changes. However, the large model itself faces a huge amount of capital and time investment from R&D to landing, and it is still a big test whether Mobvoi can maintain its strategic focus, innovation ability, and form a sustainable commercialization path in the future."

Beijing Business Daily reporter Wei Wei