AI security unicorn Yuntian Lifei submitted a prospectus: a total of 3 billion yuan raised, is expected to become the fastest listed AI chip stock on the Science and Technology Innovation Board...

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On December 8, Shenzhen Yuntian Lifei Technology Co., Ltd. (hereinafter referred to as "Yuntian Lifei"), an artificial intelligence company, disclosed its listing documents on the Shanghai Stock Exchange and became another AI company on the Science and Technology Innovation Board.

Established in August 2014, Yuntian Lifei is an artificial intelligence company focusing on the field of computer vision and a unicorn company on the AI+ security track. The company's founder, chairman and CEO Chen Ning graduated from Georgia Institute of Technology in the United States with a doctorate degree. He has held important positions in Freescale Semiconductor and ZTE Corporation, and has permanent residency in the United States.

Chen Ning, Chairman and CEO of Yuntian Lifei (Source: Yuntian Lifei official website)

At the same time, Dr. Chen Ning is also the designer of China's first commercial vector processor chip. He holds nearly 30 authorized international patents, 13 of which have been acquired by Apple.

Mainly focusing on "algorithm chip-based" technology, with a total fundraising of 3 billion

Public information shows that Yuntian Lifei takes artificial intelligence algorithms and chip technology as the core, and has the ability to turn algorithms into chips. It has Arctern algorithms, Moss chips and Matrix big data series platforms. It develops and sells artificial intelligence for application scenarios "end-cloud collaboration". Intelligent products and solutions focus on the three major industrial directions of public safety, urban governance, and new business, and AI technology drives the development of the industry.

Although the establishment time is relatively short, Yuntian Lifei filed the counseling materials with the Shenzhen Securities Regulatory Bureau on September 25, publicized the counseling summary report on November 19, and completed the counseling on November 26, with a total duration of less than 3 months. Under the precedent of Cambrian’s successful listing, Yuntian Lifei is expected to become the fastest listed AI chip stock on the Science and Technology Innovation Board.

Unlike the "AI Four Dragons", which were enthusiastically promoting IPOs during the same period, Yuntian Lifei focuses more on "algorithmic chip" technology. In the prospectus, Yuntian Lifei described its core competitiveness in this way: the underlying technical capabilities of the algorithm chip and the large-scale solution experience and system landing engineering capabilities based on the successful implementation of the "device-cloud collaboration" technical route.

Chen Ning also further explained in a media interview that "algorithm chip-based" is a concept of "deep integration of algorithm and chip design process", "algorithm chip-based" is not equal to "algorithm + chip", it is a design concept and The process is based on the designer's deep understanding of the algorithm, and extract these common operations to design your chip's architecture.

According to the prospectus, CITIC Securities acted as the sponsor for the public offering of Yuntian Lifei, and the financing scale is expected to be 3.0 billion yuan.

Among them, 800 million yuan is used for urban AI computing center and smart application research and development projects, 300 million yuan is used for scene-oriented next-generation AI technology research and development projects, and 500 million yuan is used for neural network processor-based visual computing AI chip projects. These three projects totaling 1.6 billion will be invested in four years, while the remaining 1.4 billion will be used to supplement working capital projects.

Revenue reached 230 million in 2019 and net loss was 510 million

In terms of core financial indicators, the prospectus of Yuntian Lifei shows that in 2017, 2018 and 2019, Yuntian Lifei achieved operating income of 50,233,300 yuan, 133 million yuan, and 230 million yuan, respectively. From January to September 2020, the company's revenue reached 267 million yuan. The total is 681 million yuan, with a compound annual growth rate of 114.17%.

In terms of losses, in 2017, 2018, 2019 and the first nine months of 2020, the company's net losses were 54.796 million yuan, 199 million yuan, 510 million yuan and 862 million yuan respectively; the net loss attributable to the owners of the parent company was They were 54.6365 million yuan, 195 million yuan, 500 million yuan, and 857 million yuan respectively.

As of the end of September 2020, the cumulative undistributed profit of the company's consolidated basis was RMB 160,836,200.

Regarding the scale of losses, Yuntian Lifei said that this was mainly due to the fact that the company is still in a rapid growth period, and its relative income is relatively small. During the reporting period, it continued to increase its investment in technology research and development and market development, and the amount of research and development expenditures and share payments was relatively large , Resulting in a large cumulative uncovered loss of the company.

Moreover, in 2018, Yuntian Lifei increased its investment in the construction of the R&D team, and the growth rate of R&D expenses was relatively high, resulting in increased losses.

The prospectus disclosed that Yuntian Lifei's research and development expenses during the reporting period were 43.557 million yuan, 146 million yuan, 200 million yuan, and 130 million yuan, for a total of 519 million yuan. The proportions of operating income were 86.71%, 109.57%, 86.79% and 48.79%.

Yuntian Lifei stated that the company's R&D field is mainly divided into two dimensions: the research and development of AI underlying capabilities and the research and development of AI products and overall solutions.

In addition, with the gradual maturity of various application scenarios and the continuous increase of project scale, the self-developed DeepEye1000 AI chip will also be sold independently at the end of 2019 for commercial use. The change in revenue structure will affect the changes in profit and gross profit margin to a greater extent. , This is mainly due to two reasons:

1) Continuously increase investment in research and development, formulate forward-looking technology research and development and product research and development plans, on the one hand, make products maintain strong competitiveness in market competition, on the other hand, develop new products to expand the broader market .

2) From January to September 2020, with the rapid growth of the company's overall revenue scale, the company's R&D expense ratio also shows a trend toward other large-scale enterprises.

The prospectus shows that from 2017 to 2019 and the first nine months of 2020, the gross profit margin of Yuntian Lifei was 42.39%, 56.34%, 43.71% and 40.46%, respectively, showing a trend of first rising and then falling.

Yuntian Lifei stated in the prospectus that with the addition of new competitors, market competition may intensify, resulting in a decline in the company's gross profit margin, which may adversely affect profitability.

It is worth noting that Yuntian Lifei divided the company's competitors into two major areas in the prospectus: the field of visual artificial intelligence and the field of AI chips.

In the field of visual artificial intelligence, the companies in the industry mentioned by Yuntian Lifei include Shangtang Technology, Megvii Technology, Yitu Technology, and Yuncong Technology. Yuntian Lifei wrote in the prospectus: “The above-mentioned companies all have relatively mature AI empowerment solutions, and Yuntian Lifei's service capabilities and rich project implementation experience in the entire industry chain have created differentiated competitive advantages. "

In the field of artificial intelligence chips, the peers mentioned by Yuntian Lifei include foreign companies such as NVIDIA and Graphcore, and domestic Cambrian and Horizon.

In addition, the prospectus disclosed that, as Chen Ning had been awarded the Shenzhen National Leading Talents and Shenzhen Overseas High-level Talents Program ("Peacock Project") A talents, Yuntian Lifei received relevant government subsidies of 754.91 in 2017 and 2018. Ten thousand yuan, 9 million yuan.

Security track started

Hikvision regarded as the largest camera purchaser

In terms of specific business, Yuntian Lifei mainly adopts a direct sales model. Its business income mainly comes from digital city operation management AI products and overall solutions, intelligent upgrade of human settlements and life AI products and overall solutions, AI chip sales and IP authorization. Plate.

From 2017 to 2019, the business of each segment of Yuntian Lifei grew rapidly. The revenue of digital city operation and management increased from 49.946 million yuan to approximately 201 million yuan; the income from the intelligent upgrade of human settlements increased from 287,300 yuan to 28,413,500 yuan.

Since the company's self-developed AI chip DeepEye1000 has achieved independent commercial use in 2019, it has established business partnerships with Hikvision, Alibaba Pingtou, etc. Therefore, the revenue of the chip business did not increase significantly until last year. The prospectus shows that from January to September 2020, the company's AI chip sales and IP authorization business revenue will reach 2.099 million yuan.

In each period of the reporting period, the sales revenue of digital city operation and management accounted for more than 85% of the company's main business revenue, which is the main source of the company's revenue.

Currently, the company's main hardware products sold include: DeepEye1000 AI chips for edge and end-side vision applications, face recognition edge computing equipment, non-edge computing NVR equipment for people and vehicles, traffic OD analysis edge computing equipment, and edge inference computing The mini-PCIE accelerator card.

Yuntian Lifei stated in its prospectus that if viewed by the types of products and services, the company's revenue is mainly divided into two categories: comprehensive project revenue and product sales revenue. For comprehensive project contracts, the plan generally includes software and hardware, installation, and debugging services, and the customer needs to check and accept the overall plan; for product sales contracts, the plan generally agrees to deliver software and hardware products, and the customer signs for the relevant products.

The company’s main business income is classified by product and service type composition

Since Yuntian Lifei started from the security track, its core customers mainly include China Telecom, Qingdao Public Security Bureau Laoshan Branch, Shenzhen Longgang Investment Holdings, etc.

The concentration of large customers is relatively high. In 2017, the top five customers of Yuntian Lifei accounted for 92% of the main business revenue. It is particularly noteworthy that in 2017, Shenzhen Xinyi Technology Co., Ltd., the largest customer, accounted for 50.74% of its revenue. The reason for more than 50% is that Yuntian Lifei’s business was in the early stage of the outbreak that year, and the amount of revenue that year was relatively small.

However, there was a decline in the next two years. The top five customers accounted for 78.43% of the main business revenue in 2018, and 52.11% in 2019. From January to September 2020, it rose to 71.44%.

At present, the world's first dynamic portrait recognition system developed by Yuntian Lifei-Yuntian "Deep Eye" has been applied in more than 100 cities at home and abroad, including Shenzhen, Qingdao, Chengdu, Changsha, Nanjing, Hangzhou, Shanghai, and Beijing.

At present, Yuntian Lifei is using its self-developed AI chip capabilities and its advantages on the AI+ security track to transfer more business revenue to the level of smart city construction. According to reports, at the 22nd China High-tech Fair on November 14 this year, Yuntian Lifei released a self-evolving city intelligence with the concept of "application-driven, end-cloud collaboration, full-stack evolution, and open ecology". In addition, the company signed a strategic cooperation agreement with tejianfa group and China system to jointly build an "AI brain" in the field of infrastructure and a modern digital city.

In addition, in terms of suppliers, Yuntian Lifei needs to purchase cameras from Hikvision and China Communications Systems, which account for the highest proportion of all procurement funds. For example, in 2019, Yuntian Lifei purchased cameras from Hikvision to spend 51,721,400 yuan, accounting for 26.09% of the total purchases.

In addition, Yuntian Lifei's suppliers also include Panorama Zhilian (Wuhan) Technology Co., Ltd., Shenzhen Nextcom Network Technology Co., Ltd., Shenzhen Baode Computer System Co., Ltd., Shenzhen Dawei Technology Co., Ltd., etc. Servers and accessories, system software, consumables and integrated services, etc.

Chen Ning holds 33.7% of the shares, supported by the "national team" financing

Since its establishment, Yuntian Lifei has conducted multiple rounds of financing, with a total of more than 2 billion yuan. Before this issuance, founder Chen Ning's total shareholding in Yunfei Litian reached 33.7%, and he was the actual controller. According to the prospectus, Yuntian Lifei’s shareholders also include the Shenzhen Special Economic Zone Construction and Development Group, Shenzhen Hongwen Cultural and Creative Investment Co., Ltd., and China Power Financial Investment Holdings, three "national team" companies.

In April of this year, Yuntian Lifei completed a pre-IPO round of financing of nearly RMB 1 billion. The lead investors were Guangdong Finance Fund, Everbright Capital and the old shareholder Walden International. The participating investors included Tuojin Capital, CCB International, Bank of Communications International, Bank of China Guangdong Finance, Huakong Capital, Shenbao Yiben Fund, Shenzhen Publishing Group, China Innovation and Shenzhen University, Ubisoft Sirius, Sino-US Venture Capital, etc.

In September of this year, Yuntian Lifei completed another strategic financing of more than 1 billion yuan. The investors were Shenzhen Special Economic Zone Construction Development Group (Special Construction Development) and China Electronics International Information Services Co., Ltd. and China Electronics Information Industry Group. Dianjin Investment Holdings Co., Ltd. After the completion of this round of financing, Tejianfa became the largest institutional shareholder of Yuntian Lifei.

Yuntian Lifei's financing history table

In addition, in terms of equity incentives, according to the prospectus, in order to effectively combine the interests of shareholders, the company and employees, Yuntian Lifei established Shenzhen Chuangxiang No. 2, Zhuhai Chuangxiang No. 1, Zhuhai Chuangxiang No. 2, Five equity incentive platforms, Zhuhai Chuangxiang No. 3 and Shenzhen Yuntian Chuangxiang, implemented equity incentives for key employees in 2019 and the first nine months of 2020, and confirmed share payment fees of 208 million yuan and 719 million yuan in each year.

Yuntian Lifei stated that the reason for the implementation of equity incentives is to ensure the long-term and healthy development of the company and to ensure the stability of talents and management teams. The company emphasizes that if the new equity incentive plan continues to be implemented in the future, a large share-based payment fee may still be incurred, which will delay the company's profitability. (This article first published Titanium Media App, author | Lin Zhijia, editor | Zhao Yuhang)

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