The first stock of "AIGC" fell 21% at the opening, and the concept of AI is not fragrant?

作者|James

No matter how much you don't want to admit it, the concept of AI is no longer fragrant in Hong Kong stocks!

On the 23rd, the new retail investors have been "put aside" by Chabaidao. As the largest IPO transaction in Hong Kong this year, Chabaidao fell more than 27% on the first day of listing. At this time, investors who are concerned about another new stock, Mobvoi (02438), have begun to feel uneasy.

In the grey market trading the day before the official listing, Mobvoi has fallen by more than ten percent. The bigger problem is that Hong Kong stocks actually rose that day, and the leaders of the rise were Tencent and other technology stocks. So why did it fall so badly?

The morning light of the 24th came as promised. After the opening, the opening price of Mobvoi was HK$2.98, down more than 21% from the IPO issue price. Everyone's hanging hearts are also dead.

As of the close of trading on the morning of the 24th, Mobvoi's decline narrowed to 18.16% to HK$3.11 per share.

In this situation, is it not possible to ask Mobvoi, or is it not possible for the entire Hong Kong stock market? We think there may be a third answer -- as the owner of the title of "AIGC No. 1 Share" in exchange for a bloody listing, Mobvoi represents the weakness of the so-called "AIGC concept" in the capital market.

VOL

From C-end intelligent hardware, to "AIGC first stock"

How did a company that started as a voice assistant and C-end consumer goods transform into the first share of China's AIGC? How did it first acquire and then lose Volkswagen's investment? This is the story revealed in Mobvoi's prospectus.

Shizhi Future has previously analyzed the entrepreneurial process of this Chinese Internet veteran with a history of more than 10 years, and roughly divided the development of Mobvoi into three stages: C-end hardware, B-end solutions, and large-scale model-related businesses.

In the early days, the company developed from the earliest voice assistant App to watches, speakers, and headphones, and gradually completed the layout in the field of consumer electronics and smart hardware. At the same time, the company is also expanding its offline retail channels. Due to the huge potential of large-scale deployment of smart hardware, it has the potential to become an "Internet entrance", and Mobvoi at that time received early strategic investments from Google, Goertek, Sequoia, SIG and other companies based on this vision.

However, the asset-heavy investment was considered unsustainable, and the company was also experiencing obstacles in attracting strategic investments, so it decided to make strategic adjustments. In 2019, the company eliminated offline stores and reduced its business to only watches, headphones and car machines, and other product lines were canceled. In the process, some of the executives responsible for growth also left. At present, the sales of watches and other hardware, which are stock businesses, still bring revenue to the company, but at the same time, it also causes problems such as offline store layoffs and inventory increases.

In 2017, Mobvoi's on-board hardware "Ask the Magic Mirror" attracted the attention of Volkswagen and installed it on Volkswagen models. Volkswagen invested in Mobvoi and established a joint venture to develop the car machine business, and was Mobvoi's largest customer in 2022 and 2023, with Volkswagen's revenue accounting for 42.6% of total revenue in 2022.

However, on the eve of the company's first submission in 2023, Volkswagen emptied its stake in Mobvoi and split the joint venture. Volkswagen has adopted Mobvoi's "Friendly Business" technology in the new model. This coincides with the company's new transformation to "provide solutions with generative AI and voice interaction technology at its core."

Compared with the previous accumulation of AI technology, this part of the progress may not be so impressive. Judging from the public news, the launch of the "Sequence Monkey" text model does not particularly use the company's previous technical ability accumulation; among the company's many C-end large model products - "Wonderful Text" writing, "Words Painting" painting, "Magic Sound Workshop" dubbing and "Wonderful Yuan" digital human - among them, the "Magic Sound Workshop" based on voice technology is relatively popular with more users.

Shizhi Future believes that because the development stages of Mobvoi are less related to each other, it is difficult to say that the follow-up business has effectively inherited the previous "legacy", and it can be said that the current company's operation and development expectations are also significantly different from those at the beginning. For large models and new C-end products, it has become particularly important to establish user minds and expand the number of users as soon as possible, but there is still a long way to go.

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Under the interweaving of multiple factors, "AIGC concept stocks" cannot be speculated

However, in the capital market, Mobvoi's IPO has a more important role as a weather vane, that is, through its IPO, it can be seen whether today's Hong Kong stock market is like the A-share market that began last year, and is fanatically buying the concept of "AIGC".

Mobvoi is certainly not a perfect company, but for most companies seeking an IPO, these problems are not fatal either. In A-shares, there is an obvious phenomenon of speculation, and some companies have the opportunity to be popular when they are new only by virtue of the incident of chasing after the wind and shadows, or even the homophony of the company's name. A company that is actually developing a large model is much better than those situations.

Since Baidu released Wenxin Yiyan at the beginning of last year, the volatility of AIGC concept stocks has not been interrupted in A-shares. Throughout the past year, the biggest benefit from the AIGC concept is likely to be companies with AI-related layouts in the entertainment field. Shizhi Future has written relevant reports to sort out the performance of more than 20 AIGC concept stocks in the third quarter of 2023. At that time, there were at least 60-70 such concept stocks in the market.

At that time, Shizhi Future believed that for comprehensive giants such as BAT, the large model has not yet had a fundamental impact on their business, and their stock price fluctuations are mainly affected by the external market environment and the company's other business performance. Financially, the AI business is generally viewed as part of the tech giant's cloud business. Vertical technology companies, as well as entertainment and media companies that are actively experimenting with AIGC, have achieved some short-term success in leveraging AI technology, but the impact of these technologies on their long-term financial performance and stock prices appears to be limited.

During the year, new AI companies also received a large amount of financing on both sides of the ocean, bringing another wave of small spring in the field of technology venture capital after the epidemic. In China, as of the end of last year and the beginning of this year, Zhipu and the dark side of the moon have received a large amount of financing respectively. On the other hand, companies that don't play much with the concept of AI are in a more difficult situation than before.

Among the new batch of students at the end of last year, YC, a well-known incubator in the United States, because a large number of students are from the AI field, it squeezed the registration of other fields. Originally, the Latin American team was good at innovation in finance, and they almost wiped out the freshman class of this year's YC.

Even if all the money goes to AIGC, there is still an imbalance in internal distribution, and the phenomenon of "the old is not as good as the new" is significant. When we reviewed the dark side of the moon in this round of high financing, we also mentioned that even other similar companies, as long as the founder's resume is not bright enough and the education is not high enough, it is difficult to grab financing.

So, with the exception of a handful of unicorns, is it a viable route to enter the stock market and try to raise funds? This is actually the question that the IPO wants to prove in this Mobvoi.

Regarding the A-share IPO, there has been a high premium when the new shares are listed, and then quickly fall back to the mean in two or three months, which has caused great losses to some small scatters. But in Hong Kong stocks, it is a different situation: the number and scale of new listings in Hong Kong stocks are much lower than before, and the scale of IPOs in the Hong Kong market will fall by 56% to HK$46.3 billion in 2023, the third consecutive year of decline. Chabaidao, which was listed yesterday, is already the largest IPO in Hong Kong stocks this year, but it started dismally with a 27% plunge.

This choice to clear the risk in advance will also make investors in the middle of it feel less "on a roller coaster", and lead to a low market interest in new stocks. During the Mobvoi IPO period, the public offering was subscribed 117.39 times, and the international offering was subscribed 1.58 times, which is definitely much stronger than Chabaidao, but with the addition of another Tianjin C&D, the performance of the three new shares is no different.

Therefore, the conclusion can be said to be obvious: compared with the theme and concept, Hong Kong stocks are more significantly affected by the general environment such as the Sino-US game and China's economic situation, and it is difficult to speculate in the Hong Kong stock environment with a single "AIGC concept".

There may be no better way for Mobvoi to choose to go public this time - it will be difficult to find the next way to raise funds, and it will be burdened with the problem of early investors exiting. As Yun Zhisheng and others have proven, it is more difficult to list on the A-share market. Therefore, Mobvoi can only choose to become the "first stock of AIGC".