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With the rise of the upsurge of digital economic development and the release of a large number of demands for digital transformation, my country's big data software industry has ushered in new opportunities for development. According to CCID data, in the past five years, the average annual growth rate of my country's big data software market has been about 30%, that is, it has doubled in three years.
In the context of the vigorous development of domestic big data software, thousands of companies involved in big data business in the fields of big data basic support, data services and integration have also gained broad space for development.
Among them, Zhejiang Bangsheng Technology Co., Ltd. (hereinafter referred to as "Bangsheng Technology") has served nearly 400 large and medium-sized customers through years of development. With the gradual expansion of the company's scale and revenue, Bangsheng Technology submitted a prospectus to the Stock Exchange for listing on the Science and Technology Innovation Board.
On June 19, Bangsheng Technology's listing application was accepted. In this public offering, the company expects to invest 1.267 billion yuan in fundraising. The raised funds will be used for real-time intelligent platform research and development and upgrading projects, real-time intelligent technology system industrialization, R&D center construction and marketing network construction.
The academicians of the Chinese Academy of Engineering went to the field in person, and the research and development products realized partial domestic substitution
There is no doubt that data is the new energy of this era. How to manage and use data well is a challenge for all enterprises.
Compared with "cold data", the "hot data" of real-time data has low hysteresis, and generally exists within seconds, or even milliseconds and microseconds, making data processing and analysis more difficult.
Founded in 2010, Bangsheng Technology is a big data company dealing with "hot data" , focusing on the development and application of big data real-time intelligent analysis and decision-making technology.
Through the "big data real-time intelligent platform software", Bangsheng Technology helps customers realize high-real-time, high-concurrency, and high-precision big data processing and analysis, and complete efficient decision-making and prediction based on data to maximize data value.
The prospectus shows that the company's equity is dispersed and there are no controlling shareholders. Chen Chun and Wang Xinyu are the actual controllers of the company, and they are also the main founders of the company.
Among them, Chen Chun, who graduated from Zhejiang University with a major in computer application technology, is not only a doctor, professor, but also an academician of the Chinese Academy of Engineering . Since May 2010, he has been the chairman of Bangsheng Co., Ltd. and is currently the chairman of Bangsheng Technology. According to the prospectus, the six directors of the board of directors, including Chen Chun, are all from Zhejiang University.
For a long time, domestic technologies in the field of big data and real-time intelligence are mainly derived from foreign open source technology frameworks. Backed by Zhejiang University, Bangsheng Technology has not only independently developed the underlying infrastructure , but also formed core technologies and a series of big data real-time intelligent platform products based on this architecture; and the company has designed a new expression structure StreamCube of "temporal intermediate state", which realizes high-performance data processing through multi-granularity time slicing and aggregation .
According to the test report of Saibao Laboratory, the code independence rate (number of lines) of the company's big data real-time intelligent platform core sub-platform Streamcube platform and Tucube platform reached 94.65% and 92.71% respectively. At present, a single physical node of the FlowCube platform can process more than 500,000 transactions per second, and the cluster throughput of a small number of nodes can reach millions of transactions per second.
The company replaces the intelligent risk control products of Oracle, IBM, SAS and other foreign manufacturers with the self-developed big data real-time intelligent platform products, and helps many financial institutions in my country build independent and controllable information infrastructure.
However, Bangsheng Technology, which has overcome technical difficulties, is not going smoothly on the road to commercialization and profitability.
The more income you get, the more you owe? More business gross profit margin fell by 32.52 percentage points in three years
According to the prospectus, from 2020 to 2022, the company's revenue will be 100 million yuan, 196 million yuan and 270 million yuan respectively, and the compound growth rate of operating income in the past three years will reach 63.63%. During the same period, the net profits attributable to the owners of the parent company were -30.4205 million yuan, -79.1112 million yuan and -80.5772 million yuan. As of December 31, 2022, the company has accumulated unrecovered losses of 102 million yuan.
It can be said that "the more income, the more losses".
From the perspective of splitting the business, Bangsheng Technology mainly has three major businesses, namely "big data real-time intelligent platform components", "big data real-time intelligent application solutions" and "technical services".
"Platform Components" means standardized products;
"Real-time intelligent application solutions" are customized products launched in combination with scenarios;
"Technical service" means to provide customers with services such as technology development, operation and maintenance, risk comparison, and consulting.
At present, big data real-time intelligent products have been applied on a large scale in the field of intelligent risk control and have a high market reputation. Bank customers include 5 of the 6 large state-owned commercial banks and 11 of the 12 national joint-stock commercial banks. Overall, the company has served nearly 400 large and medium-sized customers.
Source: Bangsheng Technology Prospectus (declaration draft)
Source: Bangsheng Technology Prospectus (declaration draft), revenue ratio by business type (2020-2022)
Among them, the customized product "big data real-time intelligent application solutions" is the company's largest revenue-generating business. Although the revenue continued to grow during the three years of the reporting period, it increased from 70 million in 2020 to 120 million in 2022. But its revenue share fell from 70% to 45%.
The standardized software product "Big Data Real-time Intelligent Platform Components" will perform well in 2021, and its revenue share will jump from less than 5% in 2020 to 24% in 2021. However, this rapid growth momentum will not be maintained in 2022. In 2022, revenue will decline by 11% year-on-year .
Data Ape looked through the prospectus (declaration draft) of Bangsheng Technology and found that there are two main reasons for the explosion of "platform components" revenue in 2021 : First, the sales revenue of Liucube platform components has increased by nearly 8 times compared with 2020, generating revenue of 28.4174 million yuan; the second is that the PipeACE platform components, associated map platform components, and three-core decision-making platform components recorded a total revenue of 14.1124 million yuan. These three types of platform components did not generate income in 2020.
Compared with the Liucube platform, the demand for other platform components is still unstable, and the "occasional" orders make the income of Bangsheng Technology present a strong uncertainty.
For a long time, the gross profit margin of standardized software "platform components" has been relatively high, and the three-year average in the reporting period can reach 74.5%. The gross profit margin of "big data real-time intelligent application solutions", which accounts for the largest proportion of revenue contribution, has risen steadily. The gross profit margin of its business will exceed 40% in 2022. The fluctuations in the income of these two major businesses will directly affect the company's profits.
In the performance performance in 2022, these two major profitable businesses seem to have shown signs of weakness. In 2022, the revenue of "platform components" will be 41.42 million yuan, a year-on-year decrease of 11%; although the revenue of "big data real-time intelligent application solutions" has increased, the proportion of revenue has shrunk by 5%.
Source: Bangsheng Technology Prospectus (declaration draft), the company's big data real-time intelligent platform components, the proportion of revenue and the composition of the gross profit margin of important sub-platforms
While the revenue of the two major profitable businesses has declined and the proportion of revenue has shrunk, the revenue of "technical services" has increased during the reporting period, and the proportion of revenue has continued to grow for three consecutive years. In 2022, the revenue of "technical services" exceeded 100 million yuan for the first time, an increase of 325% compared to 2020!
However, what puzzles the data is that although the proportion of "technical services" business revenue increased year by year during the reporting period, its gross profit margin showed a "two consecutive declines" from 67.04% in 2020 to 46.75% in 2021, and then to 34.51% in 2022. The gross profit margin of "technical services" business has dropped by 32.52 percentage points in the past three years!
Behind the sudden drop in gross profit margin is profit-sharing promotion or industry involution? neither.
In detail, the "technical services" business includes four services: technology development, risk comparison, operation and maintenance services, and consulting services. Compared with previous years, the gross profit margin has fluctuated but basically showed single-digit changes.
The main reason for the "two consecutive declines" in the gross profit margin of technical services is that the proportion of high-margin products has decreased, and more revenue has come from low-margin businesses, which has reduced the overall gross profit margin of the "technical service" business.
Among the four services of "technical services", "technical development services" with the lowest gross profit margin accounted for only 13% of the revenue in 2020, and reached 78% in 2022. The gross profit margins of "risk comparison services" and "operation and maintenance services" are both above 80%, but the proportion of revenue continues to shrink, and the proportion of revenue in 2022 has dropped to single digits.
Source: Bangsheng Technology Prospectus (declaration draft), the proportion of the company's technical service revenue and the composition of gross profit margin
The decline in the gross profit rate of "technical services" has also directly affected the performance of the overall gross profit rate of Bangsheng Technology.
During the reporting period, the company's comprehensive gross profit margins were 47.05%, 50.98% and 43.75%, respectively. The comprehensive gross profit margin in 2022 will decrease by 7.23 percentage points compared with the previous year, mainly due to the decrease in the proportion of revenue of big data real-time intelligent platform components with high gross profit margin, and the substantial increase in the proportion of technical services with low gross profit margin.
Source: Bangsheng Technology Prospectus (declaration draft), the proportion of operating income and gross profit margin of various businesses (2020-2022)
Do less profitable businesses, and do more and more unprofitable businesses?
In fact, Bangsheng Technology is also very helpless. In other words, it is hard money to make money in this line of work.
Source: Bangsheng Technology Prospectus (declaration draft), revenue and proportion of various industries (2020-2022)
The above picture shows the income and proportion of Bangsheng Technology's various industries. During the reporting period , the company's operating income from the financial industry accounted for 92.53%, 79.03%, and 73.51% of the total income, respectively. The financial industry's operating income continued to decline, but the overall level is still high.
In recent years, Bangsheng Technology has actively developed customers in other industries. In the midst of the digitalization of domestic software, the proportion of the company's operating income from telecommunications and the government has continued to expand.
In 2022, revenue from the telecommunications industry will account for 8.02%, and revenue from the government will account for 7.4%. Compared with 2020, the income of the financial industry in 2022 will decrease by 19.02 percentage points, of which 15.42% will be replaced by the income of the telecommunications and government industries. Among them, all telecom revenue comes from China Mobile.
From the perspective of its industry income structure, to B-side Bangsheng Technology, the main downstream customers it serves are finance, government and enterprises. These customers have a great voice and many optional service providers, and they attach great importance to Party B's service capabilities.
Judging from the income composition of Bangsheng Technology from the financial industry, the financial preference is "customized services" , the income of "big data real-time intelligent application solutions" accounts for 54%-73%, "technical services" account for 42%, and the proportion of standardized software "platform components" is less than 4%.
Source: Bangsheng Technology Prospectus (declaration draft), income composition from the financial industry (2020-2022)
The overall financial strength of the financial industry generally tends to purchase overall solutions and corresponding technical services, and it is relatively rare to purchase platform components separately.
The government and enterprises prefer "technical support" . The company's operating income from government agencies is 2.6808 million yuan, 13.1124 million yuan, and 19.9727 million yuan, respectively. In 2021 and 2022, it will increase by 389.13% and 52.32% year-on-year .
Source: Bangsheng Technology Prospectus (declaration draft), income composition from government industries (2020-2022)
Finance, government and enterprise are the basics of Bangsheng Technology's continuous operation, but with the increase in the number of customers served, the labor cost of project implementation is increasing year by year.
Whether it is customized services or technical support, a large number of technical personnel are required to provide on-site services during the project implementation phase. On-site service is the outsourcing of IT manpower , and technical personnel are stationed on site to provide technical support and maintenance for system facilities. The more projects, the greater the need for IT manpower.
Therefore, we will see the number of active employees of Bangsheng Technology increase from 528 to 1,206 between 2020 and 2022. In 2022, the company's salary will only be 223,900 yuan.
In terms of employee composition, there are 757 project implementers, accounting for more than 60% of the total number of employees, and more than twice the number of R&D personnel (there are 333 R&D personnel).
From 2020 to 2022, the labor costs involved in the salaries and benefits of the implementation personnel involved in relevant project delivery and technical services were 40.613 million yuan, 82.6416 million yuan, and 139.4814 million yuan, respectively. During the reporting period, the labor costs for project implementation accounted for 40%, 42%, and 52% of revenue .
Externally, we must serve the big Party A well; internally, we must support thousands of employees. A software company with continuous business expansion has turned into an IT manpower outsourcing company.
Does not make money, all rely on external financing for blood transfusion
During the reporting period, the net cash flow generated by Bangsheng Technology's operating activities continued to be negative, which were -39.95 million yuan, -35.05 million yuan, and -50.36 million yuan.
In addition, facing the big party A, the company's accounts receivable collection is weak.
From 2020 to 2022, the balance of accounts receivable of Bangsheng Technology will be 30.8202 million yuan, 63.7646 million yuan and 105.3539 million yuan respectively, accounting for 30.56%, 32.61% and 39.02% of the current operating income, all showing an upward trend. As the business scale expands, the scale of accounts receivable also increases, which reflects that the company's downstream voice and bargaining power are weak.
The business activities "do not produce blood", and the downstream payment is not timely. In 2020, the company's cash and cash equivalent balance at the end of the period is only 994,700 yuan. Seeing that the wages are almost out, in 2021, Bangsheng Technology urgently raised funds for blood transfusions, and raised 110 million yuan that year to tide over the difficulties temporarily.
Bangsheng Technology also admitted frankly in the prospectus that during the reporting period, the company's operating capital mainly relied on external financing. Bangsheng Technology (and its predecessor Bangsheng Limited) went through multiple rounds of financing, including A round, B round, B+ round, Pre-C round, C round, C+ round, and D round.
At present, Bangsheng Technology has as many as 18 external investment institutions as its shareholders. Investors include Xinhu Zhongbao, Junlian Capital, SDIC Major Special Fund, Fangguang Capital, NSFOCUS Technology, Hang Seng Electronics, Zhejiang University Future Venture Capital, Hongfu Ruiying and other well-known institutions. Multiple rounds of financing may also be the main reason for its equity dispersion .
As mentioned above, Chen Chun and Wang Xinyu are the actual controllers of the company. If the IPO is successfully issued, the proportion of the company's shares controlled by Chen Chun, Wang Xinyu and their concerted parties will drop to 22.63%, which is relatively low. If other shareholders reach a concerted action agreement in the future, or potential investors increase their holdings through the secondary market, further diluting the equity of the actual controller, Bangsheng Technology may have the risk of unstable control.
For the company Bangsheng Technology, Data Ape believes that on the one hand, in the processing of "hot data", with its independent innovation and self-developed technical capabilities, it promotes data capitalization and productization, and solves a series of problems such as data analysis, application, and value enhancement for finance, government and enterprise industries, and has realized its core business of "creating customer value".
But on the other hand, the company's gross profit margin is not as good as the industry average, the continuous cost of project implementation personnel is heavy, and the operating problems of revenue growth and net profit continue to lose money, which have not improved for a long time. People can't help but worry about its business situation after it hit the secondary market. After all, Bangsheng Technology cannot change the existing business model, and a company must be "profitable" in order to live long and well.
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Text: Mu Yang / Data Ape
