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——Focus on data·Changing business
Although Big A has been searching for bottom recently and the US stock market has also experienced a correction, the computing power sector and the vigorous AI craze in the current market have not diminished in momentum. "Dominator" Nvidia's stock price continues to take off, but this trend will face a key test next week - "How will Nvidia's second-quarter results perform?"
This week, NVIDIA's stock price rose by 2.80%, with a cumulative increase of 198% since the beginning of the year. As of last Friday, it closed at US$433 per share, with a market value of another US$1 trillion. The rising trend smells of fear.
Nvidia trend
Although Wall Street analysts have different expectations for Nvidia's performance, it can also show from the side the ardent hope that computing power and AI will provide new economic growth points in the context of the current global economic recession.
AI large models are setting off a new wave of artificial intelligence applications. In this craze, domestic industrial layout and support must be indispensable. The "China Artificial Intelligence Large Model Map Research Report" recently released by the New Generation Artificial Intelligence Development Research Center of the Ministry of Science and Technology shows that China's large models with more than 1 billion parameters have already 79 published. In addition to Baidu, Alibaba, Huawei, etc., which have released general large models, a large number of industry companies such as Yizhisheng, SenseTime, iFlytek, etc. have also launched large models and implemented them in specific scenarios.
Large models are considered a rare technological opportunity in a century, and whether they are general large models or industry large models, they all involve the tasks of large model training, data fine-tuning, and inference, causing exponential growth in computing power requirements. Industry insiders have said that AI computing demand will double approximately every four months, much faster than Moore's Law.
Cloud Computing Usage Panorama "China Computing Network Industry Panoramic Insights White Paper"
The first to benefit are cloud vendors. This is because cloud computing can provide computing, storage and other resources and services required for large models, and is flexible, scalable, and elastically scheduled, helping companies get started quickly, reduce costs, and become a major player in large model training, AI Necessary infrastructure for reasoning. The most exciting ones are also cloud vendors . Large models are driving the development of cloud business. Various cloud vendors are also actively providing multiple computing power, including AI computing power, for enterprises to train and deploy large models.
Cloud Computing Node "White Paper on Panoramic Insights into China's Computing Network Industry"
As one of the many cloud vendors in China, Qingyun Technology has quickly embarked on a new path of attack in the face of new market demands: first, building and continuously improving computing power infrastructure and providing diversified computing power products and services; second, leveraging Cloud native technical capabilities provide enterprises with efficient and convenient cloud native services and help them achieve cross-platform application deployment and construction.
On August 14, enterprise-level cloud service provider and digital solution provider Qingyun Technology released its financial report for the first half of 2023.
Cloud service business situation
From the perspective of operating income, Qingyun Technology's operating income increased year by year before its listing, but the growth of operating income was affected after the epidemic. The operating income from 2020 to 2022 was 430 million, 424 million, and 305 million respectively. Judging from the 2023 semi-annual report, its operating income was 175 million yuan, a year-on-year increase of 11.4%, and there was an inflection point in business growth.
Judging from the operating income structure of Qingyun Technology in recent years, the proportion of Qingyun Technology's cloud products has gradually decreased, while the proportion of cloud services has increased year by year. Although the cloud service direction has always been in a state of loss, the amount of losses has gradually decreased from the semi-annual report. The gross profit has converged from -15% in last year's semi-annual report to -10.5% this year.
Qingyun Technology Business Situation
Judging from the current overall situation of Qingyun Technology, its cloud service direction focuses on financial customers, such as China Everbright Bank and China Merchants Bank. However, in the face of competition from domestic first-tier manufacturers such as Alibaba Cloud, this area of business is not competitive enough and product prices have dropped. The company has not invested much in this direction in the early stage, so it has put pressure on Qingyun Technology's profitability. Judging from the details of Qingyun Technology's semi-annual report, it has laid off some of its cloud service R&D personnel, thereby achieving the goal of reducing costs and increasing efficiency in the cloud service direction.
Judging from the current situation of the company's cloud products, the qingcloud cloud platform is a stable and profitable product of the company. Judging from the current overall trend of operating income and profits, it is difficult to become a top cloud computing manufacturer in China. , but there are currently many market segment opportunities in the market, such as small and medium-sized banks, scientific research institutions, etc., which can support the development of smaller cloud platforms.
Qingyun Technology’s top five customers
The company's operating income does not appear to be overly dependent on a single customer. According to the 2022 annual report, the sales of the top five customers accounted for 40% of total sales, and the number one customer accounted for 14%. Generally speaking, customer concentration is not high, which confirms that there are currently many market segment opportunities in the field of cloud services.
Therefore, judging from the current structure of Qingyun Technology’s operating income, the overall strategy can be described as cost reduction and efficiency improvement. The gross profit of cloud products is relatively high, but the situation within cloud products is equally complex. It is mainly the qingcloud cloud platform and hyper-converged systems that support the current business growth of cloud products. However, the operating income of hyper-converged systems has declined significantly in recent years. The company's main Focus on improving pure software direction with higher gross profit.
In the cloud service market, there are currently many domestic manufacturers, especially first-tier manufacturers such as Alibaba Cloud, which can eat up larger customers. As for Qingyun Technology, it should focus more on small and medium-sized customers and segmentation To develop the market, avoid direct competition with first-tier manufacturers, and realize the strategy of surrounding the cities from rural areas by improving their own service and after-sales advantages. As for the current situation of cloud services, as the entire market gradually expands in the next few years, this direction is expected to usher in a turnaround in gross profit, but we must pay attention to changes in the input-output ratio in this regard. Optimize products and modules as well as organizational processes to improve the profitability of this product direction.
Qingyun Technology Cloud Product Segmentation
overall financial analysis
Judging from the profit status of Qingyun Technology, Qingyun Technology's profits have been at a loss in recent years. From 2020 to 2022, Qingyun Technology's losses were 163 million yuan, 283 million yuan, and 244 million yuan. Its losses will reach their maximum in 2021. Last year's annual report showed that its losses were relatively converged. At the same time, according to the latest semi-annual report, its semi-annual profit was a loss of 82 million, which was a greater degree of convergence than last year's semi-annual report.
Qingyun Technology’s operating income and profit status
Qingyun Technology's gross profit has increased in recent years, from about 10% in the past two years to the current 20%.
Looking at sales expenses and administrative expenses, the 2022 annual report accounts for nearly 20% of sales expenses, and administrative expenses have been relatively stable, accounting for about 10% of operating income.
Qingyun Technology's R&D expenses From 2020 to 2022, the proportion of R&D investment in operating income is basically more than 30%. At the same time, although its operating income has declined in the past two years, its R&D intensity has been increasing. In the past two years, R&D intensity has reached more than 35%. On the one hand, this can show that Qingyun Technology attaches great importance to R&D investment. On the other hand, high-intensity R&D investment is also an important reason for Qingyun Technology's current losses.
Judging from this year's semi-annual report, Qingyun Technology's R&D investment accounted for 26% of operating income, which has dropped from more than 30% of R&D investment in the previous two years. Its R&D personnel have dropped from 346 in last year's semi-annual report to this year's There are 263 people in the semi-annual report. The reduction of R&D personnel is the main reason for the current decrease in Qingyun Technology’s R&D investment.
Qingyun Technology various expenses
There are two reasons for Qingyun Technology's losses. On the one hand, Qingyun Technology is still in the early stages of development, and its products are still in the market expansion period, which does not fully cover expenses. On the other hand, Qingyun Technology develops many business lines, has more R&D personnel, and has larger salary expenditures. Therefore, Qingyun Technology's scientific research currently puts greater pressure on profitability.
Judging from the current business situation of the company, the operating income of cloud products accounts for the proportion of the company's overall operating income is gradually declining. At the same time, cloud products such as qingcloud cloud platform and hyper-converged systems for hybrid cloud and private cloud are more profitable, accounting for the company's operating income. The proportion of income is large. Judging from the company's strategic situation, Qingyun Technology's focus on increasing investment in businesses with higher gross profits is beneficial to the company's development.
Industry market analysis
Qingyun Technology, which was listed on the Science and Technology Innovation Board in 2021, raised net funds of 687 million yuan. But six years of losses and declining revenue have disappointed some market investors. Since this year, in order to seize the market, domestic giant cloud manufacturers have begun to cut prices. After Alibaba Cloud lowered its core product prices, Tencent Cloud also began to cut prices, and JD Cloud even shouted the slogan "We promise to pay if you buy more."
The first person to start the price war was Alibaba Cloud. Previously, the official website showed that more than one million people had logged into Alibaba Cloud to use it in the month since its price reduction. However, according to the current market situation, the products that some manufacturers have reduced prices are not core products. Many of them are products of the previous generation, with the purpose of cultivating customers.
In any case, the price war has begun, and the question of how to make a choice is before small and medium-sized cloud manufacturers.
However, in the long run, there are still certain market opportunities for Qingyun Technology. Qingyun has established close cooperative relationships with potential state-owned cloud integrators (such as Huawei, Inspur, etc.). Qingyun has the opportunity to participate in state-owned cloud projects and is expected to benefit from state-owned cloud integrators. Obtain higher marginal benefits in cloud projects. In addition, Financial Information Innovation is expected to see a surge in volume in recent years. Considering that Qingyun Technology has a high penetration rate in the financial industry (the company’s weighted average penetration rate in the financial industry for strategic cooperation in 2022 exceeds 20%), Qingyun Technology’s penetration in the financial field rate and single customer purchase volume are expected to further increase.
In addition, the 2022 survey report of the China Academy of Information and Communications Technology shows that companies using hybrid cloud in my country account for 18% of the cloud computing market. Gartner predicts that after 2025, 90% of organizations will consider using hybrid cloud to manage infrastructure; and IDC predicts that hybrid cloud will account for 67% of the entire cloud market share in the future.
Hybrid Cloud Growth Forecast
Qingyun Technology began to explore hybrid cloud solutions as early as 2014. Thanks to the consistent underlying architecture advantages of public cloud, private cloud and managed cloud, Qingyun Hybrid Cloud can deliver completely consistent services by seamlessly connecting public cloud and private cloud. The functions and usage experience combine the convenience and economy of public cloud with the security of private cloud. Therefore, in this development of cloud services, Qingyun Technology is expected to gradually improve its current market position and profitability.
qingcloud cloud platform operation chart
Judging from the current situation in the same industry, Qingyun Technology is still in the early stages of development compared to leading domestic cloud service providers such as Huawei Cloud and Kingsoft Cloud, and its operating income is relatively small. However, compared with companies such as Capital Online and Youked that are also in the early stages of development, its advantage is that its gross profit margin can gradually increase and its profit situation can be gradually improved. Therefore, judging from the current industry comparison, the cloud service market is facing intensified competition. Under this market background, the hybrid cloud market will continue to expand in the future. Qingyun Technology may be accompanied by the growth of its own business. development, its financial data is expected to gradually improve.
Comparison between Qingyun Technology and comparable manufacturers
Judging from the comparison of the R&D intensity of the above six companies, Qingyun Technology has been investing heavily in R&D, and its R&D investment last year was the highest among the six companies. Judging from the current R&D investment of Qingyun Technology, such as Boss unified operation platform, Express cloud platform, IASS infrastructure service platform, etc., they are all developed towards hybrid cloud. R&D investment in hybrid cloud accounts for more than 70% of its total current research projects.
Qingyun Technology R&D Intensity
SWOT analysis and strategic recommendations
In order to have a more comprehensive and in-depth understanding of the overall situation of Qingyun Technology, we will conduct a SWOT analysis on it.
SWOT analysis
Overall, Qingyun Technology's advantage lies in its accumulated experience in hybrid cloud and its large investment in scientific research. At the same time, this advantage will gradually have a positive impact on profitability, but the weakness is that in the fierce competition in the cloud service market, compared to the giants who are weaker, especially in the current price war, they may be at a disadvantage. This requires the company to focus more on services and other aspects to enhance the company's overall competitiveness. The current opportunity is that the situation of cloud products is relatively stable, and it is possible to achieve further growth in the current information innovation field and the wave of artificial intelligence. On the other hand, as the hybrid cloud market gradually expands and the industry accumulates more, it is possible that in this process , Qingyun Technology achieved explosive growth. The threat situation is that there are currently many manufacturers in the field of cloud services in my country. It is not ruled out that new technological forms will emerge and the performance of public clouds and private clouds will be greatly improved, resulting in the explosion of hybrid cloud platforms that is less than expected.
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Text: Zhang Nan / Data Ape
