As one of the few listed companies in the domestic A-share market with the concept of in-vehicle visual interaction, Arcsoft Technology's semi-annual report performance is not optimistic.
The data shows that in the first half of 2023, ArcSoft Technology achieved operating income of 340.1919 million yuan, a year-on-year increase of 29.73%; net profit attributable to shareholders of listed companies was 50.0386 million yuan, a year-on-year decrease of 10.30%.
Among them, intelligent driving and other IoT smart device vision solutions achieved operating income of 22.4466 million yuan (including software revenue of 16.72 million yuan), a year-on-year decrease of 15.01%. Among them, the in-cabin visual perception interaction is still the main source of revenue contribution.
Up to now, there have been dozens of mass-produced truck models equipped with ArcSoft's DMS, OMS, Face ID, TOF gestures, out-of-vehicle body recognition camera, AVM and other in-vehicle and in-vehicle algorithms.
These models include Ideal L9, Great Wall Harvard Series, Euler Series, Tank Series, Hezhong Nezha Series, Changan CS75PLUS, UNI-T, Changan New Energy Dark Blue SLO3, Geely Haoyue L, Galaxy L7, Lynk & Co 06, Chery Star Traveling to the moon, Dongfeng Lantu Free, dreamer, chasing light.
As for the outboard part, the Westlake solution integrating software and hardware that the company is developing has completed the deployment of software functions for ACC, LCC, and AEB, and has entered the stage of actual vehicle function testing.
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In addition, based on passenger car solutions, the company also provides targeted software and software-hardware integrated vehicle vision solutions for large commercial vehicles. During the reporting period, the company expanded the fixed-point development work of pre-installed commercial vehicles and construction machinery head OEMs.
According to the monitoring data of Gaogong Intelligent Vehicle Research Institute, from January to June 2023 in the Chinese market (excluding imports and exports), 1,327,300 passenger cars equipped with IMS systems (visual perception interaction) are standard equipment, a year-on-year increase of 76.62%; Among them, DMS carried 893,000 vehicles, a year-on-year increase of 45.37%.
Obviously, even considering some terminal price factors, ArcSoft's pre-installation market performance is still lower than the market average. The company said that the current pre-installation adopts a piece-based model, and the acceptance status and revenue performance still depend on the customer's final shipment status.
At present, at the supplier level of the in-cabin IMS system, chips (mainly Horizon, partially integrated in the cockpit domain control SoC), camera hardware (O-Film, Zhihua Technology, Desay SV, Hikvision, etc.), algorithms (Hong Software, MINIEYE, etc.) and other core software and hardware have also been fully localized.
However, the competition has also heated up.
Some software and hardware integration solution suppliers even offer a price for hardware fee + free software. Companies that originally focused on pure software solutions are all integrating software and hardware, but their profitability is not good. "Before the market has a large-scale effect, the more you do, the more you lose."
In the semi-annual report of ArcSoft Technology, it is written: being challenged by other competitors in the industry, it faces the risk of a decline in gross profit margin and a decline in market share caused by intensified market competition.
At the same time, the report pointed out that in the field of intelligent driving, the pre-installed fixed-point projects currently obtained by the company are mainly aimed at software algorithms in the cockpit. If you do not have powerful mass-produced products, you may face the risk of missing development opportunities.
Previously, ArcSoft Technology stated to the outside world that in 2022, the company will launch more out-of-vehicle ADAS products, such as BSD, AVM, etc. (signed multiple designated projects). In 2023, the company will continue to develop many functions that integrate parking or cabin parking.
However, for ArcSoft Technology, the mobile phone track is still the main business.
During the reporting period, the company's mobile smart terminal visual solution business revenue was 311.8621 million yuan, accounting for 91.67% of the company's operating revenue. The company's main downstream customers are concentrated in the smartphone market.
Among them, the company's top five customers had sales of RMB 231,428,700, accounting for 68.03% of the total sales. If the decline in smartphone shipments, the delay in the launch of new models by major customers and other reasons lead to a decline in procurement demand, it will have an adverse impact on the company's overall operating performance.