With a loss of 2.3 billion yuan in three and a half years, Yuncong Technology successfully IPO! Will the AI ​​"Four Little Dragons" be resurrected with full blood?!

Good news came from the Science and Technology Innovation Board on July 20, and the cloud passed the meeting smoothly. Yuncong Technology will be the first AI company among the AI ​​Four Little Dragons (Shangtang, Yuncong, Yitu, Megvii) to successfully go public.

For a long time, attention and doubts about the listing of the AI ​​Four Little Dragons have never stopped. This time, Yuncong Technology is the first to go public, which not only shows the company's own strength but also undoubtedly provides a boost for the AI ​​industry.

Why is Yuncong?

Yuncong Technology is an artificial intelligence company that provides efficient human-machine collaborative operating systems and industry solutions. It is committed to promoting the industrialization of artificial intelligence and the intelligent transformation and upgrading of various industries. With independent, controllable and constantly innovating core technology of artificial intelligence, it has realized the closed-loop of core technology from intelligent perception to cognition and decision-making. The company's self-developed artificial intelligence technologies such as cross-mirror tracking, 3D structured light face recognition, two-layer heterogeneous deep neural network, and adversarial neural network technology are all at the leading level in the industry.

The following is a map of Yuncong's main products and services.

Simply put, the core product of Yuncong is a human-machine collaborative operating system, and the other is to provide industry solutions.

The cloud from human-machine collaborative operating system refers to the underlying system platform of the operating system that realizes from device access, perception, storage, calculation, understanding to decision-making through the unified management of cloud-side-end devices, AI applications, and resources.

Yuncong Technology mainly provides comprehensive solutions for the four major areas of smart finance, smart governance, smart travel, and smart business. Among them, the human-machine collaborative operating system and core applications of companies in the smart finance field have covered more than 400 financial institutions, including the six major state-owned banks. Products and technologies in the smart governance field have served 30 provincial-level administrative regions in the country, including politics, law, schools, and scenic spots. Application scenarios, smart travel products, and solutions have been deployed in hundreds of civil airports, including nine important airports in China's top ten airports, and smart business products and solutions have been radiated to car showrooms, shopping malls, and brands Many application scenarios such as stores have brought smart, convenient and humanized AI experience to hundreds of millions of people around the world.

From the perspective of revenue share, the revenue of human-machine collaborative operating systems accounted for 46.61%, and artificial intelligence solutions accounted for 53.39%. However, in comparison, the artificial intelligence solutions business has declined significantly in the first half of 2020.

In addition, Yuncong's artificial intelligence solutions are mainly based on the combination of software and hardware, which accounts for relatively high revenue. Yuncong’s self-developed AIoT devices will be commissioned to ODM/OEM production.

Yuncong Technology's AI algorithm model/software capabilities are strong, mainly based on the four core technological breakthroughs of "multi-modal data perception, multi-domain knowledge reasoning, human-computer co-creation, and data security sharing". In addition, AIoT devices have strong collaboration capabilities, and a wealth of application solutions have already been implemented. These are the advantages of Yuncong.

Other three little dragons

Looking at Yuncong Technology alone, its AI-enabled applications and independent core technologies are excellent. However, the other three dragons of the AI ​​Four Little Dragons also have their merits.

SenseTime independently developed and established a deep learning platform and supercomputing center, and launched a series of artificial intelligence technologies, including face recognition, image recognition, text recognition, medical image recognition, video analysis, unmanned driving, and remote sensing. Business covers smartphones, Internet entertainment, automobiles, smart cities, education, healthcare, retail, advertising, finance, real estate, and other industries.

Megvii Technology has developed cutting-edge computer vision algorithms to empower IoT devices. The company provides customers with algorithms,

Software and artificial intelligence empower a full-stack solution for IoT devices. The company's artificial intelligence-enabled solutions mainly include personal Internet of things, urban Internet of things, and supply chain Internet of things.

With the core of artificial intelligence chip technology and algorithm technology, Yitu Technology develops and sells artificial intelligence solutions including artificial intelligence computing hardware and software. Yitu Technology is committed to comprehensively solving the fundamental problems of machine viewing, listening, understanding and planning, providing high-performance, high-density, and universal computing power for the development and popularization of artificial intelligence to meet the continuous demand of cloud data centers, edge computing, and the Internet of Things. Increasing demand for smart computing.

The technologies and applications for these four companies are still different. For example, Shangtang’s AI platform covers a wider range of applications. Megvii has advantages in face recognition algorithms, and also has its own deep learning framework, and is mainly oriented to the three major IoT applications. And Yitu has not only algorithm technology but also AI chip.

We might as well compare the basic situation of these four companies:

At present, there is no definite news about SenseTime's IPO plan in Hong Kong. This is the only AI company among the four that has not officially announced its IPO plan. Yun Cong has successfully IPO. Megvii moved from Hong Kong to go public on the Science and Technology Innovation Board and has received inquiries. Yitu Technology has clearly terminated the listing on the Science and Technology Innovation Board.

Judging from the situation of the three AI companies announced, the similarity lies in the high proportion of R&D investment and large losses. Looking at the first half of 2020 alone, Yuncong’s revenue is 220 million yuan and Yitu’s 380 million yuan. There is a certain gap, but Yuncon has lost 2.3 billion yuan in three and a half years, but Yitu’s loss has reached 7.22 billion yuan. The amount of loss is very large. In addition, Megvii lost 9.6 billion yuan in the first half of 2016-2019, and there was also a relatively large loss.

Previously, it was precise because of the poor performance of AI companies that they continued to lose money that caused concerns about the profitability of these companies. It is rumored that some AI companies have already implemented various measures such as layoffs and salary cuts, business shrinkage, and strategic transformation to cope with the uncertainties of future development.

However, as an emerging industry, AI is a very core technology, whether it is chip technology or algorithm platform, and it also needs capital support. At least the listing of Yuncong Technology shows that the prospects of the AI ​​industry are not so bleak. Except that Yitu has terminated its listing, Megvii's IPO is currently receiving more attention from the industry, and progress should be made soon. It is still unknown when SenseTime will IPO.

At the World Artificial Intelligence Conference held in Shanghai recently, the author saw SenseTime's AI solutions for multiple application scenarios, such as smart driving solutions, smart education programs, smart medical care, etc., and was shocked by the fact that AI applications have already been implemented. So much. It is believed that the actual combat capabilities of AI companies will become stronger as more and more solutions are implemented.

After listing, risks are still accompanied

Yuncong listed many risk factors in its prospectus, including core talent loss, R&D failure, customer concentration, and supplier concentration. Here, the author lists several risks for analysis.

The first is the issue of industry competition. Yuncong mentions the competition of artificial intelligence companies such as SenseTime, Megvii, and Yitu, but also faces the promotion of artificial intelligence-enabled transformation of products by visual equipment manufacturers such as Hikvision. Challenges, the overall market competition is fierce.

In fact, the reason why some AI companies have high financing and high R&D investment but have not achieved particularly good performance in the market is largely a problem of competition and landing. It is not only the competition of similar AI companies but also because the traditional giants firmly control the market. Not only are they not conserving the old but occupying the customer advantage, they are constantly developing to maintain their leading edge. AI companies themselves are start-ups. If they do not find a good track, but instead compete with traditional giants, the chances are very small.

Let's look at the "entity list" risks. In the context of Sino-US trade frictions, from May 2020 to the present, the US Department of Commerce announced that many Chinese companies and institutions, including Yuncong Technology, will be included in the "Entity List." The company's current business operations directly bring about significant adverse effects but will have certain adverse effects on the company's future overseas business expansion and artificial intelligence theoretical research and academic exchanges.

In addition, the gross profit margin is unstable, the cash flow of operating activities continues to be negative, and if the continued loss after listing may touch the risk of delisting, they are also common problems faced by AI companies.

The listing gives AI companies access to financing and makes them more responsible. The key is to strengthen one's own hematopoietic ability, fight against risks, return various indicators to rationality, and return to the essence of business.