Source: prospectus
Source | LiveReport big data
Abstract: Yisou Technology submitted a prospectus to the Hong Kong Stock Exchange on February 27, 2023 for listing on the Hong Kong main board. The company is deeply engaged in the research and development of artificial intelligence recommendation technology. and successfully applied its own intelligent recommendation engine-Yisou artificial intelligence recommendation engine to a variety of scenarios.The income in 2021 was 433 million yuan, and the net profit was 50 million yuan, down 74.36% from the same period last year. The income in the first nine months of 2022 was 333 million yuan.
LiveReport big data was informed that Easou Technology Holdings Limited (hereinafter referred to as "Yisou Technology"), which was established in 2005, submitted an application for listing on the Hong Kong Stock Exchange on February 27, 2023 for listing on the main board of Hong Kong.This is the first time the company has submitted an application for listing, and the sole sponsor is Bank of China International.
$Easou Technology Holdings Limited (810465.HK)$It was listed on the new third board with the stock code 870926, listed in 2017 and delisted in 2019. On September 26, 2019, the company submitted its listing application to the Shanghai Stock Exchange and voluntarily withdrew it in 2020. In addition, the company filed a listing application with SEC in 2014 and planned to list on the New York Stock Exchange, then withdrew its listing application.
The company was founded in 2005 and deeply engaged in artificial intelligence recommendation technology research and development, and the company has successfully applied the company's own intelligent recommendation engine-Yisou artificial intelligence recommendation engine to a variety of "data and human connection" application scenarios. including digital reading recommendation, digital marketing, online game distribution and other digital content. Companies usually use Yisou artificial intelligence recommendation engine to collect, analyze, match or predict the needs and ╱ or preferences of users and corporate customers to meet their different needs. Specifically, the company should search artificial intelligence recommendation engines in the following areas:
-recommendation for digital reading. Effectively predict the preferences of users, dynamically adjust the recommendation strategy and intelligently recommend literary content that can accurately meet the personalized needs of users. The company launched its flagship product Yisou novel App in 2013 and App in 2017, which provides a large number of e-books to users and has well-designed product features and personalized reading experience to cater to their different preferences.
-Digital marketing. Collect, analyze and predict users' preferences for advertising content, and match the needs of advertisers, in order to achieve accurate advertising delivery in suitable third-party advertising channels. The company's proprietary intelligent advertising platform is easy to be pushed into the core platform for connecting the needs of advertisers and suitable advertising space for cooperative media.
-online game release. Identify online games with high commercial value and strong market performance, and release and recommend these games to appropriate users based on the company's analysis of user behavior and game categories or content preferences.
-other digital content. Recommend the value-added services of telecom operators, including all kinds of digital content such as music and ring back tones, to help them reach their target users.
The company's artificial intelligence recommendation technology is the basis for driving all the company's business. The company is committed to continuously improving artificial intelligence recommendation technology and uses a variety of artificial intelligence algorithms to combine advanced artificial intelligence technologies (such as machine learning and deep learning) with digital content and user behavior characteristics. Through the company's dedicated research and development efforts in artificial intelligence recommendation technology, the company has developed a six-tier Yisou artificial intelligence recommendation engine.
Source: prospectus
Investment highlight
The company is a technology-driven mobile Internet company dedicated to the development and application of Yisou artificial intelligence recommendation engine.
The company has successfully applied Yisou artificial intelligence recommendation engine to a number of "data-to-human connection" application scenarios.
The company operates the largest independent third-party digital reading platform in China, and provides users with fair, accurate and personalized digital reading recommendation service through Yisou artificial intelligence recommendation engine.
As an independent third-party platform connecting content providers and users, the company establishes a mutually beneficial business ecosystem to realize multiple realizations of its own platform traffic.
Making use of a high participation and huge user base, growing user traffic and a large amount of user behavior data, the company has formed a virtuous circle of artificial intelligence recommendation engine optimization.
The visionary management team has the ability to execute and has a deep understanding and insight into technological developments and changing industry trends.
Company information:
Official website: http://www.easou.com
Address: room 403, Building 5C, Software Industry Base, Keyuan Road, Nanshan District, Shenzhen City, China
Hong Kong address: 31 / F, Tower 2, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong
Financial analysis
For the 2 years ended 31 December 2022 and the first nine months of 2021-2022:
The income was about 410 million yuan, 433 million yuan, 315 million yuan and 333 million yuan respectively, with a year-on-year growth rate of 5.61% in 2021 and 5.68% in the first nine months of 2022.
Gross profit was about 214 million yuan, 209 million yuan, 155 million yuan and 173 million yuan respectively, with a year-on-year growth rate of-2.48% in 2021 and 11.50% in the first nine months of 2022.
The net profit was about 31 million yuan, 50 million yuan, 36 million yuan and 30 million yuan respectively, with a year-on-year growth rate of 59.75% in 2021 and-15.51% in the first nine months of 2022.
The gross profit margin is about 52.19%, 48.18%, 49.24% and 51.95%, respectively.
The net interest rates are about 7.63%, 11.55%, 11.28% and 9.02%, respectively.
Source: LiveReport big data
In the first nine months of 2022, the company had revenue of 333 million, a slight increase from the same period last year, but a decline in profits. in addition, the company had trade receivables of 117 million, net asset value of about 280 million, net cash outflow of operating activities of 14 million, and cash and equivalents of about 89 million at the end of the period.
Industry prospect
The company's business is restricted by the development of China's Internet business industry, especially China's digital content industry. The intelligent recommendation application of digital content provides a wide range of development space for the company. The size of China's Internet business by income increased from 831.3 billion yuan in 2016 to 2.054 trillion yuan in 2021, and is expected to increase from 2.1095 trillion yuan in 2022 to 2.4257 trillion yuan in 2025, with a compound annual growth rate of 4.8 per cent. Specifically, the size of China's digital content industry by income increased from 542 billion yuan in 2016 to 1.4173 trillion yuan in 2021, and is expected to increase from 1.4935 trillion yuan in 2022 to 1.6592 trillion yuan in 2025, with a compound annual growth rate of 3.6 per cent.
Source: prospectus
The market size of digital reading has increased from 16.7 billion yuan in 2016 to 41.6 billion yuan in 2021, with a compound annual growth rate of 20.1%. The increase in the market for digital reading is mainly due to paid digital reading and advertising revenue from free digital reading. Under the influence of the development trend of the mobile Internet industry and the competition for the time and attractiveness of live video and short video to users, the revenue from intellectual property operation will be an important driving force for the growth of China's digital reading market in the near future. With the development of copyright protection and free digital reading platform, the impact of the COVID-19 epidemic and the increasing popularity of the Internet and mobile devices, the demand for digital cultural entertainment users is increasing, and the revenue from the digital reading market will continue to increase. The size of the digital reading market is expected to increase from 42.1 billion yuan in 2022 to 52.7 billion yuan in 2025, with a compound annual growth rate of 7.8 per cent.
Source: prospectus
Industry status
According to Analysys, the average number of monthly active users of Yisou novel App in 2021 was about 18.4 million, ranking fifth in China's digital reading market in terms of average monthly active users. From 2016 to 2021, the average number of monthly active users of Yisou novel App ranked among the top five in China's digital reading market. Among the top 10 applications in China's digital reading market in 2021 (in terms of average monthly active users)The average daily use time of Yisou novel App in 2021 is 98.0 minutes, ranking fourth in terms of per capita daily use time.
Source: prospectus
Comparison of IPO of companies in the same industry
The selected comparison company in the same industry is China Literature (00772.HK)
China Literature is a pioneer in China's online literature market, operating a leading online literature platform, and the company has nine major brand products. They are QQ Book, starting Chinese Network, starting Girls Network, Chuangshi Chinese Network, Yunqi Academy, Xiaoxiang Academy, Tea incense, Fiction Reading Network and Love novel Bar.
Through strategic partner Tencent, China Literature has dedicated and direct distribution channels in its leading Internet product portfolio. The company also authorizes the content to third-party partners such as "Baidu, Inc.", "Sogou", "JD.com Mall" and "XIAOMI see more".
Source: LiveReport big data
Major shareholder
As at the latest practicable date, Mr. Wang held 104855884 shares through Growth Value, Fase Ltd and Qiyuan, accounting for approximately 34.02% of the issued share capital of the Company. Mr. Wang, Growth Value, Fase Ltd and Qiyuan will continue to be the single largest shareholders, while the company will not have any controlling shareholders.
Source: prospectus
Management situation
Mr. Wang Xi, 47, executive director, chairman of the board and chief executive officer. Mr. Wang joined the group in June 2007. He was appointed as a Director on 9 February 2022 and transferred to an Executive Director on 2 December 2022. He is responsible for providing guidance on the overall development of the Group. Mr. Wang has about 22 years of experience in management. Mr. Wang graduated from Southwest University of Finance and Economics in July 1998 with a bachelor's degree in accounting.
Mr. Chen Jun, 43, executive director, chief financial officer and joint company secretary. Mr. Chen joined the Group in September 2009. He was appointed as an Executive Director on December 2, 2022 and is mainly responsible for the overall strategic decisions, day-to-day management and operations of the Group's Finance Department. Mr. Chen has about 16 years of experience in accounting and finance.
Mr. Zhao Lei, 46, executive director and chief operating officer. Mr. Zhao joined the Group in September 2006. He was appointed as an Executive Director on December 2, 2022 and is responsible for the overall strategic decisions, business planning, day-to-day management and operations of the Group. Mr. Zhao has about 20 years of working experience in management.
Pre-listing financing
Source: LiveReport big data
Intermediary team
According to LiveReport big data, it is appropriate to search a total of 9 science and technology intermediary teams, including a total of 1 sponsor, nearly 10 sponsor project data are average, and a total of 3 company lawyers are general project data. Overall, the historical data of the intermediary team is mediocre.
Source: LiveReport big data
Sponsor underwriting historical performance
The failure rate of recent sponsors of Bank of China International is 35.90%.
Source: LiveReport big data
Public opinion analysis
At present, through the Tianyan search website, it is found that the main operator of Yisou Technology is Shenzhen Yisoutian Science and Technology Co., Ltd., and its negative news is as follows:
2007 own risks; most of them are court announcements for suing or being sued by others.
There are 487 peripheral risks; more than 50 of them are legal representatives who have been sued for disputes such as contracts and false publicity, and most of the rest are lawsuits brought by Shanda Network of shareholders.
8 historical risks; 6 enforced, 2 administrative penalties
Among the 646 early warning reminders, most of them are major personnel changes, name changes and other changes of affiliated companies.
On the whole, the company has more legal proceedings, but there is no large-scale negative public opinion on the Internet.
Recent IPO market situation of Hong Kong stock market
According to LiveReport big data, the average IPO market value of nearly 10 IPOs is 4.872 billion, the maximum market value is chalk and the minimum market capitalization is Huaibei Green Gold shares; the average PE is 18.72 times, and the PE is in the upper-middle level; the average number of applicants is 6978, and the average subscription multiple is 14.97The average percentage of cornerstones is 38.2%, which has declined recently.
The performance of the Hong Kong new stock market has picked up somewhat, with nearly 10 new stocks rising an average of 4.26% in the dark market and an average of 3.22% on the first day. Among them, beautiful countryside, Lehua entertainment dark market and bright performance on the first day, all rose more than 40%; Huaibei Green Gold shares had the worst performance on the first day, falling more than 40%.
Source: LiveReport big data