The Zhitong Finance App learned that on October 18, TI Cloud Inc. (TI Cloud Inc.) passed the Hong Kong Stock Exchange listing hearing, and CICC acted as its sole sponsor.

Company profile:

Tianrun Cloud provides a variety of cloud-native customer contact solutions that enable enterprises to interact with customers through multiple channels. According to the Insight Consulting Report, in terms of revenue in 2020, the company is the largest customer contact solution provider deployed in the public cloud in China, with a market share of 10.2%. In 2020, the company promoted more than 2.3 billion voice calls, text messages, and text chat interactions between the company and its customers through multiple channels, which helped improve the productivity and efficiency of the enterprise.

Tianrun Cloud's solution runs entirely in the cloud and allows deployment and management on devices in multiple locations. The company's customers use cloud computing and storage resources in the cloud without significant upfront investments in hardware, infrastructure, or in-house IT support. The company's cloud-based solutions are developed in-house by its R&D team and mainly include three products: intelligent contact center solutions, remote seat solutions, and ContactBot solutions.

According to the prospectus, in 2020, Tianrunyun served more than 2,200 customers, 61 of which were major customers, with annual purchases exceeding RMB 1 million. In the same year, major clients contributed 76.8% of the company's total revenue. The company is committed to cultivating long-term relationships with customers and regularly assesses its performance using customer retention rates and net retention rates based on value. In 2019 and 2020, the company's SaaS customer retention rates were 73.7% and 77.9% respectively. In the same period, net retention rates for all SaaS customers on a monetary basis were 112.9% and 105.0%, respectively, while the net retention rates for large SaaS customers were 112.6% and 114.6%, respectively. For SaaS customers, for the six months ended June 30, 2021, the SaaS customer retention rate and net retention rate based on value were 76.8% and 113.6%, respectively.

Business models and market opportunities:

Tianrun Cloud's cloud-based solutions mainly include three products: intelligent contact center solutions. Remote seat solutions. ContactBot solutions.

The company provides adaptable, reliable, scalable and secure customer communication solutions in the cloud, mainly public clouds and private clouds. Using cloud computing technology, the company provides high-capacity and high-availability solutions using a software-as-a-service (SaaS) model and a virtual private cloud (VPC) model.

According to the Insightful Consultation Report, China's cloud-based customer contact solutions industry has developed rapidly in recent years. Its market size (in terms of revenue) increased from RMB 3.2 billion in 2016 to RMB 9.1 billion in 2020, with a compound annual growth rate of 29.5%, and is expected to reach RMB 24.4 billion by 2025, with a compound annual growth rate of 21.8% from 2020 to 2025. In addition, industry trends have also brought growth to the company, including the expansion of application scenarios, higher requirements for data security, and the popularization of AI technology.

Competitive advantages:

Tianrunyun's strengths include the following: a leading position in a rapidly developing industry, a platform with excellent performance built for specific purposes, strong technical capabilities, highly flexible solutions that drive significant network effects, and long-term partnerships with a broad and high-quality customer base.

In terms of technical capabilities, in 2019, the company obtained the “Information System Security Level Protection (MLPS) Level 3 Certification” issued by the Ministry of Public Security. This certification is the highest level that non-financial institutions can achieve, demonstrating the company's strength in system operation and information security. According to the insight consulting report, the company is the first customer communication solution provider to establish IT infrastructure based on SD-WAN technology (seamless integration of the network with the cloud) in China. It is also the only industry enterprise that has achieved a dual-cloud dual-active deployment, achieving excellent reliability and usability.

On the solution side, by using more than 500 application programming interfaces (APIs) and software development kits (SDKs) provided by the company, the company's customers can quickly incorporate selected features of the company's solution portfolio into their internal systems to respond to changing business priorities. Highly flexible solutions that drive significant network effects. The more large enterprises the company serves, the deeper the company's understanding of customer needs and the more APIs the company creates and accumulates during project execution, and the more business and customers the company obtains through this.

In terms of customer base, in 2020, out of the top 20 companies ranked by revenue in China's technology, education and insurance industries, the company provided services to 12, 12 and 9 of them, respectively. Of these, 25 have maintained business relationships with the company for more than three years. Total revenue from the top 20 customers in these three industries increased from RMB 86.4 million in 2018 to RMB 163.6 million in 2020, with a compound annual growth rate of 37.6%.

Financially, 96.4% of the company's 2020 revenue came from recurring revenue from SaaS solutions. Annual profit increased at a compound annual growth rate of 10.3% from 57.7 million yuan in 2018 to 70.2 million yuan in 2020, of which the net profit margin in 2020 reached 19.8%. As of December 31, 2020, the company has been profitable for six consecutive years. The vast majority of SaaS companies around the world are still in a state of loss. The company is one of the few profitable SaaS companies.