It features chipization of algorithms to maximize the balance between edge computing power and costs. Founder Chen Ning has both academic background and practical experience. He was recalled to China to start a business in 2014 after being inspired by the artificial intelligence wave. The company focuses on artificial intelligence algorithms and chip technology to provide customers with integrated solutions. Compared with other computer vision algorithm and model companies, the company's difference is that it integrates algorithms into chips, mainly used in hardware devices such as cameras, terminals such as cameras, edge devices, etc., to maximize the balance of edge-end computing capabilities and costs. Scenario deployment capabilities are outstanding, and are expected to have strong large-scale replication capabilities.

The product system is more comprehensive, and the ability to implement projects is outstanding. Compared with peers, the company has a more complete business chain, with a layout in business segments such as algorithms, chips, technology platforms, application solutions, and hardware, which ensures autonomy and control of core links. Thanks to the collaboration and adaptation between self-developed algorithms, chip technology, and hardware products, the company has an advantage in continuously optimizing the engineering capabilities and implementation efficiency of application solutions. This can better guarantee the customer experience, thereby winning a good reputation in the industry and facilitating the acquisition of subsequent projects.

Expanding from lighthouse cities to surrounding cities has potential for growth. The company uses projects already implemented in cities such as Shenzhen and Qingdao as hubs, radiates to surrounding cities, and replicates and expands its business. At the same time, on the basis of large-scale project implementation experience and accumulated word of mouth in the industry, the company has also begun to provide lightweight, standardized products and AI solutions to customers in small and medium-sized cities, commercial terminals, etc. It is expected that the business volume will gradually be released, and as the number of customers grows, the business scale effect will gradually become apparent. Currently, the company has plenty of on-hand orders. As of the end of June 2022, the amount of on-hand orders was about 236 million yuan, which provided some support for the company's subsequent performance.

Investment proposal: Yuntian Lifei has fully benefited from the industry growth brought about by intelligent security scenario restoration and subsequent increase in penetration rate. Through the algorithmic chipization model, it is conducive to rapidly achieving a high revenue growth rate for large-scale scenario deployment. It is estimated that 2023-2025 will achieve revenue of 791 million, 1,108 million, and 1,496 million. In the context of the new wave of AI driving the growth in demand for computing power, demand for marginal computing power also deserves great attention. Similar to the Cambrian and Nvidia benefit logic in the cloud, the company has a valuation premium that gives 20-25 times PS in 2023. We believe that the reasonable market value range for the company after listing is 15.82 billion to 19.775 billion yuan, corresponding to a reasonable value range of 44.55-55.69 yuan per share.

Risk warning: industry competition intensifies, technology iteration is too fast, and project expansion falls short of expectations