Donkey Track Technology's revenue increased by 26%, using AI to create a second curve Zang Weizhong vowed to receive a salary with a market value of HK$10 billion

Yangtze River Business Daily News ● Yangtze River Business Daily reporter Huang Cong

The company's market value is not ideal, and the founder of Donkey Track Technology takes himself "under the knife".

On the evening of September 20, Donkey Track Technology (01745. HK) announced that Zang Weizhong, chairman of the board of directors and executive director of the company, voluntarily promised to voluntarily give up any remuneration and bonuses for the period from August 1, 2024 to December 31, 2035 before the company's market value reaches HK $10 billion.

According to the annual report, Zang Weizhong's salary and allowance in 2022 will be 160,000 yuan, and the retirement plan contribution will be 39,000 yuan, with a total of 199,000 yuan, and the salary and allowance in 2023 will be 136,000 yuan, and the retirement plan contribution will be 16,000 yuan, with a total of 152,000 yuan.

In fact, the performance of Donkey Track Technology in recent years is not bad.

In the first half of 2024, Donkey Track's revenue will reach 269 million yuan, an increase of about 26.1% year-on-year; During the period, the profit was 52.346 million yuan, a year-on-year increase of 1.6%.

Donkey Track Technology said that based on the revolutionary breakthrough of AI technology and the company's long-term R&D and application in the field of big data, AI and XR technology, the commercial operation of "Donkey Track MR" will become the company's second growth curve.

The founder's salary and allowance in 2023 will be 136,000

Founded in December 2013, based on the two core strategies of scenic guide and global guide, Donkey Track Technology focuses on the research and development of tour guide software, global guide system and the development of tourism-related supporting business.

The birth of Donkey Track Technology originated from a poor museum visit by the company's founder, Zang Weizhong. He wanted to ask the staff to explain, but it was the peak of the tourist season and the staff was understaffed. To rent a recording box on site, you need to queue, register, and pay a deposit. The recording box is for public use, the power is not enough, the battery is troublesome, and the staff has a bad attitude.

After experiencing the above pain points firsthand, Zang Weizhong couldn't help but think: smart phone explanation, which can not only be convenient for tourists but also reduce the operating cost of scenic spots, why not use smart phones to realize the explanation function? After some investigation, Zang Weizhong found that the online electronic guide of the scenic spot is a blue ocean market.

At present, Donkey Track Technology has become a world-renowned expert in smart tourism industry solutions, and was successfully listed on the main board of the Hong Kong Stock Exchange in January 2020.

At the time of listing, the issue price of Donkey Track Technology was HK$2.12 per share, raising HK$592 million.

However, the stock price of Donkey Track Technology peaked when it was listed, and then continued to fluctuate and decline in the following four and a half years. As of September 20, 2024, the company's share price reached HK$0.37 per share, down about 93% from the issue price, with a market capitalization of HK$624 million.

At this time, Zang Weizhong decided to use "zero salary" to boost the company's market value.

On the evening of September 20, Donkey Track Technology issued an announcement showing that Zang Weizhong, chairman of the board of directors and executive director of the company, voluntarily promised to voluntarily give up any salary and bonus from August 1, 2024 to December 31, 2035 before the company's market value reached HK $10 billion, and the voluntary commitment is valid until December 31, 2035. The remuneration adjustment was approved by the Remuneration Committee and the Board of Directors of the Company on 20 September 2024.

Donkey Track Technology stated that the salary adjustment reflects Zang Weizhong's determination to operate the Company and demonstrates his commitment to the Company. The Board is of the view that the remuneration adjustment is in the overall interests of the Company and its shareholders.

According to the 2023 annual report, Zang Weizhong, aged 42, is the chairman of the board of directors and an executive director of Donkey Track Technology. He is also currently a director of Zhonghexin Technology Holdings Limited and Zhituo Technology Holdings Limited, and an executive director and general manager of Horgos Donkey Track, Guangzhou Donkey Track, Horgos Yuantai Technology Co., Ltd. and Guangzhou Donkey Track Digital Technology Co., Ltd.

According to the annual report, Zang Weizhong's salary and allowance in 2022 will be 160,000 yuan, and the retirement plan contribution will be 39,000 yuan, with a total of 199,000 yuan, and the salary and allowance in 2023 will be 136,000 yuan, and the retirement plan contribution will be 16,000 yuan, with a total of 152,000 yuan.

"Donkey track MR" may become the second growth curve

In fact, the performance of Donkey Track Technology in recent years is not bad.

From 2017 to 2019, the revenue of Donkey Track Technology was 71.613 million yuan, 302 million yuan and 542 million yuan respectively, and the profit during the period was 34.198 million yuan, 141 million yuan and 232 million yuan respectively, both of which achieved rapid growth.

However, in 2020 and 2021, the revenue of Donkey Track Technology was 295 million yuan and 382 million yuan respectively, and the profit during the period was -101 million yuan and -550 million yuan respectively, showing huge losses for two consecutive years.

Obviously, due to the impact of the epidemic, it is reasonable for Donkey Track Technology to perform poorly.

In 2022 and 2023, the revenue of Donkey Track Technology will be 344 million yuan and 585 million yuan respectively, and the profit during the period will be 37.537 million yuan and 145 million yuan respectively, and the company's revenue and profitability will be quickly recovered.

In the first half of 2024, Donkey Track's revenue will reach 269 million yuan, an increase of about 26.1% year-on-year; During the period, the profit was 52.346 million yuan, a year-on-year increase of 1.6%.

In this regard, Donkey Track Technology said that the company's net profit growth was mainly due to the increase in revenue, which was due to the increase in the sales of the company's online e-tour due to the strong recovery of the tourism market, as well as the active implementation of a number of expenditure and budget policies to control sales and distribution expenses and administrative expenses.

In the first half of 2024, the gross profit margin of Donkey Track Technology was approximately 37.1%, compared to approximately 37.0% in the same period last year. According to the company, the increase in gross margin was mainly due to the higher gross profit from the sale of online e-tours through travel agents.

As of the end of June 2024, Donkey Track Technology has developed a total of 66,200 online e-tours of tourist attractions in China and overseas, covering 44,500 tourist attractions in China from 36,300 at the end of June 2023.

Donkey Trail Technology said that as a technology-driven enterprise, the company has always insisted on applying innovative technology to cooperative scenic spots, and through the use of innovative technologies such as AI large model technology and MR technology with online electronic guides, consumers can not only get the sensory effect of visual impact, but also perfectly experience the seamless switching of guide content.

Based on the revolutionary breakthrough of AI technology and the company's long-term R&D and application in the field of big data, AI and XR technology, the commercial operation of "Donkey MR" will become the company's second growth curve, and the relevant business strategies will create long-term value for shareholders.

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