"Abandoning The Examination" And "Ai Star Group" Listing In Yitu Science And Technology Innovation Board

"Only when the tide recedes, can we know who is swimming naked." AI unicorn, which used to be pursued by capital crazily, is facing the double torture of market and regulation.

After two times of IPO audit suspension, eatu Technology Co., Ltd. (hereinafter referred to as ETO Technology) finally pressed the "termination key" on the way to listing on the science and technology innovation board.

The termination of the IPO audit of Yitu technology was withdrawn on its own initiative. 21st century economic reporter learned from close regulators that the termination was due to the updating of financial reports. According to the announcement of the Shanghai Stock Exchange, on June 11 this year, eatu technology applied for "suspension" because the financial information recorded in the application documents for listing had expired and needed to be supplemented.

Does ETO have a plan to restart IPO? On July 6, the reporter repeatedly called ETO technology, but no one answered.

Looking back at the IPO of ETO technology, it can be said that there are many difficulties. Its listing application was accepted in November 2020, and the first round of inquiry was only answered in February 2021. In March, the company took the initiative to request the audit to be suspended; It was just resumed on June 11, but was suspended due to the updating of financial data. 19 days later, ETO finally chose to withdraw its application.

Yitu technology and Yuncong technology, Kuangshi technology and Shangtang technology are known as the "four little dragons" of computer vision in the domestic AI field. Who is the first stock of AI going to flower has always been one of the hot spots in the market. But at present, the IPO progress of the above companies is not smooth. At the same time, cloud Zhisheng and laser radar manufacturer Hesai technology, which has always wanted to be "the first stock of AI voice", have also terminated the listing road. For a while, the market's pessimism towards AI track is getting stronger.

In recent years, the scale of China's artificial intelligence market continues to grow, and hot money rapidly flows into the industry, and many AI companies are born. However, under the hot track and rising valuation, the uncertain commercialization prospect of artificial intelligence is becoming more and more obvious.

IPO abandoned due to financial update

According to the prospectus, ETO technology was founded in 2013 by Zhu long, a doctor of statistics from the University of California, Los Angeles (UCLA). ETO technology is registered in the Cayman Islands. As a red chip company, it applied for the public offering of CDR and listed on the science and technology innovation board.

As far as business is concerned, ETO technology takes AI chip technology and algorithm technology as its core, develops and sells AI solutions including AI computing hardware and software.

At present, Yitu technology, Kuangshi technology and Yuncong technology have all launched IPO of science and technology innovation board. Among them, Kuangshi technology was the first to launch the Hong Kong stock IPO, but it ran aground unexpectedly when it came to the door, and then moved to the science and technology innovation board in March this year. Yuncong technology submitted its application for listing on the science and technology innovation board in December last year. As of June 25, this year, it has completed the second round of inquiry, and has been suspended for a time. The IPO plan of Shangtang technology has been reported from time to time, but it has not been officially announced so far.

Therefore, ETO technology used to be a strong contender for "Ai first share". At the same time, as a red chip enterprise, the IPO of Yitu technology carries many attempts and expectations. It is the second enterprise to apply for CDR listing on the science and technology innovation board after the No. 9 company.

On February 10, this year, ETO technology first answered the inquiry letter, answering questions on the ownership structure, related business and financial data, indicating that it has met the requirements for applying for the initial public offering of depository receipts and listing on the science and technology innovation board.

However, in March, ETO technology suspended its audit due to the initiative of its issuers and sponsors. According to 21st century economic report, the suspension was related to the red chip structure. Because the company is a red chip enterprise with agreement control structure, the issuer and the sponsor need a long time to implement the rules and regulatory verification requirements, so they actively applied to the Shanghai stock exchange for suspension.

The reporter noted that in the first round of inquiry, when asked by the Shanghai Stock Exchange on the time, amount, way and method of fund support for domestic entities under the agreement control framework, and the legality and compliance of capital flow and profit transfer arrangements, Yitu technology said that during the reporting period, the capital flow between domestic entities under the agreement control structure was legal and compliant, There is no profit transfer.

The stalled review was restarted on June 11. On the same day, due to overdue financial data, ETO's listing review was suspended again.

After two suspension, eatu did not have a restart, but decided to withdraw its IPO on June 30.

The reporter learned that the company took the initiative to cancel orders to update the financial report. According to media reports, when the financial data is updated, it is expected to return to the "examination room" of the science and technology innovation board according to the chart. With full preparation for the examination in the early stage, the company's second breakthrough is expected to be more efficient. However, the news has not been confirmed by ETO technology.

Hard to burn out "money scene"

When it comes to AI, "burning money" is the first impression that emerges in the minds of many investors. With the disclosure of prospectuses, Yitu and Yuncong, the market finally has an intuitive perspective to focus on the AI unicorn.

According to the financial data disclosed by ETO technology, from 2017 to the first half of 2020, the company's operating revenue was 68.7189 million yuan, 304 million yuan, 717 million yuan and 381 million yuan respectively; In the same period, the net profit attributable to the parent company was - 1.166 billion yuan, - 1.161 billion yuan, - 3.642 billion yuan and - 1.299 billion yuan respectively.

At the same time, the ever expanding inventory amount and high accounts receivable also cast a shadow on the revenue of ITOT. At the end of each reporting period, the book value of Yitu technology inventory was 32 million yuan, 74 million yuan, 260 million yuan and 289 million yuan respectively, accounting for 3.34%, 3.47%, 16.03% and 10.84% of current assets at the end of the reporting period; The book value of accounts receivable is 26 million yuan, 249 million yuan, 552 million yuan and 687 million yuan respectively. By the end of June 2020, the book value of accounts receivable accounted for 25.73% of current assets.

Although the loss is expanding, ETO technology is not ambiguous in R & D. During the reporting period, the company's R & D expenses were 101 million yuan, 291 million yuan, 657 million yuan and 381 million yuan respectively, accounting for 146.94%, 95.77%, 91.69% and 100.10% of the operating revenue of each period.

On the one hand, the R & D investment of enterprises continues to be high, on the other hand, the amount of losses is gradually expanding. AI enterprises want to seek development, and the demand for external financing is high. Listing seems to be the only way to go, and it is also the original intention of the scientific and technological innovation board to support hard technology enterprises.

According to the IPO of ittu science and technology innovation board, it is planned to raise 7.505 billion yuan to invest in the new generation of artificial intelligence IP and high-performance SOC chip project, the edge computing system project based on visual reasoning, the new generation of artificial intelligence computing system project, the high-level visual intelligent computing platform project, the new generation of voice semantic ability platform project, and the supplementary liquidity demand reaches 2.24 billion yuan.

The competition and dilemma faced by Yitu technology are described in the prospectus as follows: the level of artificial intelligence technology is currently in the stage of rapid development, a large amount of capital is constantly invested, and new technical solutions are constantly emerging. Chip design needs to invest a lot of money and personnel continuously, and the process and result of R & D project are uncertain. In addition, the process of industrialization and marketization of the company's technological achievements will also be uncertain.

"If the company fails to make a correct judgment on the direction of R & D, key technologies fail to achieve breakthroughs, relevant performance indicators fail to meet expectations, or the products developed fail to be recognized by the market, the company will face the risks of difficult to recover the early R & D investment, achieve the expected benefits and lose technical advantages, which will have an adverse impact on the company's performance and competitiveness."

In fact, it's similar to looking at technology and cloud from technology.

From 2017 to 2019 and from January to September of 2020, Kuangshi achieved revenue of RMB 304 million, RMB 850 million, RMB 1.26 billion and RMB 720 million respectively. Over the same period, the net profits attributable to the parent company were respectively RMB 775 million, RMB 2.8 billion, RMB 6.64 billion and RMB 2.85 billion.

Cloud technology is a little better. From 2017 to the first half of 2020, the revenue of cloud technology was 64 million yuan, 484 million yuan, 807 million yuan and 220 million yuan respectively, and the net profit loss attributable to the parent was 106 million yuan, 180 million yuan, 1 708 million yuan and 286 million yuan respectively.

From the explanation of the three companies, the reasons for the increase of losses year by year are basically the same. On the one hand, due to the rise of the overall valuation level of AI industry, the fair value of preferred shares of the company increased correspondingly, resulting in Book loss; On the other hand, it is continuous R & D investment.

An AI employee told reporters, "Ai companies can make little profit, and more than 90% of the industry is in loss, because AI has a lot of investment in software, hardware and talent."

"The AI industry as a whole is not making money and has been developing at a loss. IPO indicates that enterprises are still short of money, and the gap is not small. The way that enterprises could finance through venture capital has been blocked. They can only use the stock market to meet their growing capital needs. " Zhang Xiaorong, President of the Institute of deep science and technology, said.

Is it tuyere or foam?

With the IPO termination of a number of AI companies including eatu technology, the market has also fallen into cold thinking about the previous AI investment craze.

The popularity of AI track can be roughly calculated from 2016. Tencent, an Internet giant, established AI Lab in this year, while Baidu transformed to AI. In 2017, artificial intelligence was written into the government work report for the first time.

According to the data released by AI media consulting, the financing scale of China's artificial intelligence industry has been expanding since 2014, reaching a peak in 2018, reaching 131.1 billion yuan, and 89.8 billion yuan in 2019.

It was in 2017 and 2018 when artificial intelligence was at the peak of investment, and the view of AI surface prosperity and bubble vigilance also appeared.

In September 2018, Kaifu Lee, chairman and CEO of Innovation workshop, publicly stated that "too many people use AI to package projects, resulting in high valuation, which will be adjusted in the future."

This is not alarmist. According to the statistical data of the "report on the status and trend of Sino US AI venture capital in 2017" jointly released by Tencent Research Institute and it orange, as of June 2017, more than 50 Chinese and American AI enterprises have closed down.

Yitu technology also talked about the foreseeable "market competition" in the prospectus: due to the great market development potential of artificial intelligence industry and the rapid growth of market demand, large-scale comprehensive science and technology enterprises and innovative enterprises in vertical subdivision field are entering one after another. In different scenarios of artificial intelligence technology realization, the company also faces fierce competition from traditional hardware manufacturers, software platform service providers and Internet companies. The company expects that the degree of competition in the industry will continue to increase in the future.

What makes the market feel hesitant is whether the valuation of AI companies after listing will be affected by the general environment in this context. Many market people interviewed believe that the decisive factor lies in technological innovation, including their own business, technical barriers, market barriers and even shareholder structure.

"There is no consensus on the valuation of AI. It depends on market, policy and company performance. In the future, these enterprises will face challenges mainly in the research and development of innovative technologies, followed by the application of new technologies, and thirdly, to shorten the time for commercial development as soon as possible and make profits as soon as possible. " Zhang Xiaorong said.

For market competition and "bubble theory", practitioners' observation may be more convincing.

"In the first two years, the bubble was big, because people's perception of AI was biased. Some customers thought that AI could do anything at first, but they were gradually educated by the market, and they became more and more pragmatic, and their cognition of AI became more and more profound. This is an opportunity for us." A person in charge of an artificial intelligence start-up company said in an interview with the reporter of the 21st century economic report.

This person is optimistic about the "bubble". He said, "there must be bubbles. Without bubbles, there will be no way to flourish. But bubbles will always burst. After the tide ebbs, there will always be people who will be eliminated, but there will always be people who will survive. Who can survive, in fact, is to find application scenarios and business models, and eventually there will be a number of companies. "

Although AI investment ebbs, there is no doubt that AI development will usher in a new window period. "From the beginning of the epidemic, the environment is very friendly to AI, because the risk of industrial chain and artificial labor is high, so AI technology is needed to replace it. For technology companies, the epidemic is a driving force, and the market understands that they must rely on technology to solve problems. "

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