Text: Hong Kong Stock Research Society, Sang Yu
Following the "premature death" of its listing in the United States in 2021, in September this year, Qiniu Intelligent launched an impact on the capital market for the fourth time. Now it has finally landed on the Hong Kong stock market.
On October 16, the milestone moment, the first day of listing on the Hong Kong Stock Exchange, what Qiniu Intelligence wanted to receive most was not a piece of good news. The issue price was HK$2.75, and the opening price today was only HK$1.6, down 41.8% from the issue price.
It is reported that Qiniu Intelligence was established in 2011 and is one of the earliest platforms to provide audio and video cloud services in China. It mainly provides audio and video PaaS services (MPaaS) and application platform as a service (APaaS), and is one of the few companies in China that has the ability to develop comprehensive and high-performance MPaaS products and have the technical capabilities to integrate and cover all aspects of audio and video services.
So, why did Qiniu Intelligence, which was the first to enter the game and has a technical side, fail to gain the favor of the capital market?
Continuous losses are the biggest problem at present
According to the prospectus, from 2021 to 2023, Qiniu Intelligent will achieve revenue of 1.471 billion yuan, 1.147 billion yuan, and 1.334 billion yuan respectively. Revenue for the first quarter of 2024 was $342 million, up 26.2% from $271 million in the same period last year.
The source of the picture is from the prospectus
In terms of revenue, iResearch data shows that in 2023, the total revenue of Qiniu Intelligence will account for 1.5% of the entire audio and video cloud service market. At the same time, it is also the third largest audio and video PaaS service provider in China, with a market share of 5.8%; It is the second largest audio and video APaaS service provider in China, with a market share of 14.1%.
Although the revenue performance is relatively stable and occupies a leading position in the segment, the shortcomings in profitability are more obvious. From 2021 to 2023 and the first quarter of 2024, Qiniu Intelligent will achieve gross profit of 291 million yuan, 229 million yuan, 280 million yuan and 70.54 million yuan respectively; The gross profit margin was 19.8%, 19.9%, 21% and 20.6%, respectively.
Gross profit margin is increasing, but at the same time, it is "depleted" by losses. According to the prospectus, from 2021 to 2023, Qiniu Intelligent will lose 220 million yuan, 213 million yuan, and 324 million yuan respectively; The adjusted losses were 106 million yuan, 119 million yuan and 116 million yuan, respectively.
In the first quarter of 2024, Qiniu Intelligence's loss during the period even reached 148 million yuan, with a loss rate of 43.2%, compared with a loss of 98.33 million yuan in the same period last year, and a loss rate of 36.3% during the period, which is significantly higher.
In addition, the growth of the fair value loss of Qiniu Intelligence is also more significant. in 2023, it will reach 156 million yuan, a year-on-year increase of 86.2%; In the first quarter of this year, the value has climbed to 111 million yuan, accounting for 32.6%.
The high cost of sales may be the main reason behind the continuous growth of losses. According to the prospectus, from 2021 to the first quarter of 2024, the sales cost of Qiniu Intelligent will be 1.179 billion yuan, 918 million yuan, 1.053 billion yuan, and 272 million yuan respectively, accounting for 80.2%, 80.1%, 79%, and 79.4% of the total revenue, respectively, accounting for a high proportion.
Among them, although sales and marketing expenses have been declining year by year, from 193 million yuan in 2021 to 139 million yuan in 2023, accounting for 13.1% to 10.4%, administrative expenses are also increasing simultaneously, from 119 million yuan in 2021 to 135 million yuan in 2023, accounting for 8.1% to 10.2%.
It is particularly noteworthy that while the cost of sales remains high, R&D investment is also quietly shrinking. It has declined from 143 million yuan in 2021 to 128 million yuan in 2023.
On the whole, Qiniu Intelligence's loss difficulties still need to be overcome with hard work. Although the current stock price performance is a feedback and prediction of past performance and future performance trends, in the long run, the future road of Qiniu Intelligence will not be too difficult.
The user retention rate exceeds 90%, and Qiniu Intelligence "accumulates steadily"?
As a "pioneer" in the field of cloud computing solutions, Qiyun Intelligence has already broken through the threshold of 1 billion yuan in total revenue, which is enough to win the name of "unicorn".
From the perspective of business distribution, the main products and services of Qiniu Intelligence are divided into two major sectors, one is the MPaaS business for customers with strong development capabilities, and the other is the APaaS business suitable for the rapid entry of development whites.
The source of the picture is from the prospectus
Among them, the MPaaS business occupies a dominant position. According to the prospectus, from 2021 to 2023, MPaaS business revenue will account for 93.1%, 76.3%, and 73.1% respectively.
It is reported that up to now, Qiniu Intelligence has launched a total of 4 MPaaS audio and video solutions, namely QCDN, a proprietary content distribution network to accelerate content distribution, Kodo, an object storage platform for storing content, and Dora, an interactive live broadcast product and an intelligent media data analysis platform.
Not only that, in the first quarter of this year, more than half of Qiniu's MPaaS business customers purchased two or more MPaaS audio and video solutions at the same time. It can be seen that the subsequent growth potential of Qiniu Intelligent MPaaS business segment should not be underestimated.
The source of the picture is from the prospectus
In the first quarter of this year, the total revenue of the two major projects accounted for 96.5% of the total revenue of the business.
According to the prospectus, the gross profit margin of MPaaS increased from 17.3% in 2022 to 19.3% in 2023, mainly due to the improvement of QCDN and Kodo business efficiency after the company adjusted its infrastructure layout and redeployed some servers. Moreover, the company's total revenue in the first quarter of this year increased by 26.4% year-on-year, which is also due to MPaaS products (especially QCDN and Kodo).
Looking at the APaaS business, the APaaS audio and video solution mainly adopts the "1+N" model, that is, it can be flexibly applied to diverse scenarios through one platform. The solution focuses on five application scenarios: social entertainment, video marketing, Internet of Vision, intelligent new media, and metaverse.
At present, the revenue sources of the APaaS business are mainly concentrated in two projects: social entertainment and video marketing. In the first quarter of this year, the combined revenue of the two projects accounted for 87.7% of the total revenue of the segment. From 2021 to 2023, the proportion of video marketing and video chat projects in total revenue will continue to grow.
In particular, in 2023, the number of APaaS paying customers of Qiniu Intelligence has achieved a significant increase, with an increase of 135% compared to the same period last year. In the same year, the business's paying customer retention rate was also as high as 87.9%, and it further increased to 93.7% in the first quarter of this year.
During the reporting period, the number of new APaaS customers upgraded from the original MPaaS customers was 159, 322, 459 and 275 respectively, increasing year by year. The number of new APaaS customers adopting APaaS audio and video solutions is gradually increasing, and the average revenue contribution is also increasing significantly.
The two core businesses are "scrambling to be the first", and both show full momentum. Perhaps, the "highlight" of Qiniu Intelligence has not yet begun.
"Complex" Relationships Achieve a Better "Future"
In addition to the support of the core business, Qiniu Intelligence also has a strong "backer". After taking a closer look at the prospectus, we will find that among the investment shareholders, there is also the existence of "Ali system", that is, Taobao China.
Judging from the current shareholding structure, Taobao China is the second largest shareholder of Qiniu Intelligence, with a shareholding ratio of 17.69%, second only to the company's founder Xu Shiwei (who holds 17.96% of Qiniu Cloud's shares).
As one of the Internet giants, Alibaba, the company behind Taobao, is also involved in the cloud business, and its Alibaba Cloud is currently one of the largest cloud service providers in China.
The two sides are both competitive and cooperative. As the saying goes, "the building near the water gets the moon first", and the contacts between the two sides are also very close. Taobao China is both a customer and a supplier of Qiniu Intelligence.
In 2021, Taobao China is one of the major customers of Qiniu Intelligence, contributing 30.901 million yuan, accounting for 2.1% of the total revenue. During the same period, Taobao China was also one of the main suppliers of Qiniu Intelligence, with a cumulative procurement transaction volume of 374 million yuan.
However, considering multiple factors such as listing, the transaction amount between the two parties has declined significantly in the past two years. The amount of sales to Alibaba Cloud decreased from 30.901 million yuan in 2021 to 421,000 yuan in 2023, and the transaction amount of purchases from Alibaba Cloud also decreased from 374 million yuan in 2021 to 37.398 million yuan in 2023.
In this regard, Qiniu Intelligence also said that since 2017, the two sides have established a long-term cooperative relationship, and have understood each other's operations, quality control and specific requirements for many years. The partnership is expected to continue.
With the blessing of this "complex relationship", Qiniu Intelligence has refined a good skill.
It is reported that in the first three months of this year, the average daily audio and video playback volume has exceeded 4.6 billion minutes, far higher than the industry level of 1 billion minutes.
As of March this year, the cumulative number of registered users of Qiniu Intelligent exceeded 1.51 million, and the number of active users exceeded 640,000. In addition, among the top 20 in China's audio and video application download list in 2023, as many as 15 application operators use Qiniu Intelligence, which is almost "dominating the list".
Moreover, according to the prospectus, about 38% of the net funds raised by Qiniu Intelligence's IPO will be used to penetrate and consolidate the market share of application scenarios in the APaaS business and develop and expand the customer base. This means that the core business will make great progress with the support of follow-up funding.
After four years, Qiniu Intelligence finally landed in the capital market, which is its first step and the starting point of the next 10,000-mile journey. In the follow-up, we will wait and see whether Qiniu Intelligence can turn things around and turn losses into profits.