With the integration of AI and internet of things, namely AIoT, driving the interaction between the physical world and the digital domain, industrial digitization becomes possible. According to the Burness Consultancy report, driven by the strategic layout of digital infrastructure and massive investments, China has become one of the fastest-growing countries in the global AIoT industry. The revenue of China's public domain AIoT industry is expected to grow from 408 billion yuan in 2023 to 744 billion yuan in 2028, with a compound annual growth rate of 12.8%, far exceeding the global market growth rate.

Against this backdrop, the AIoT company, TSL, officially submitted its application for listing on the Hong Kong Stock Exchange main board on September 26, with the potential to become the first AIoT company to go public domestically in the near future. As a pioneer and leader in China's public domain AIoT industry, TSL is expected to leverage the power of capital markets to reshape the future of China's AI technology industry and sustainable urban development.

A decade of perseverance to create a 'unicorn' in the public domain AIoT industry.

Zhitong Finance App learned that TSL was established in 2015, focusing on the innovative integration of AI and IoT technologies from the beginning, dedicated to reshaping the future industry and sustainable urban development with AI technology.

As one of the top five platform-type companies in China's AIoT field driven by OS, TSL's business focuses on four major directions: industrial digitization with AI, smart cities with AI, smart living with AI, and smart energy with AI. With AIoT technology and integrated hardware and software products, TSL has achieved large-scale commercialization of AI applications, with new signed orders increasing year by year. In 2021, 2022, 2023, and the six months ending June 30, 2024, the number of new signed customers was 161, 175, 193, and 89, respectively.

With a continued increase in customer numbers, TSL's business scale is rapidly expanding. In 2023, TSL achieved a revenue of 1.006 billion yuan, with a year-on-year growth rate as high as 36.3%; among which, the revenue from industrial digitization with AI, smart cities with AI, and smart energy with AI grew by 32%, 47%, and 151.3% respectively. In terms of business structure, in 2023, about 62% of TSL's revenue came from industrial digitization with AI, an increase of about 11 percentage points compared to 2021, while smart cities with AI accounted for 22.3% of the company's revenue share.

Teslink's full-stack public domain AIoT products have been highly recognized in the Chinese and global markets. As of June 30, 2024, Teslink's products have been deployed by over 800 customers from more than 150 cities globally, with business covering markets in China, the United Arab Emirates, Singapore, and Australia; as of the same date, Teslink's hand orders amount to approximately 2 billion yuan, poised to become the earliest profitable AI company.

Teslink's business scale is rapidly expanding, with a steady increase in internationalization level. The main internal factor is the company's research and development team composed of top engineers and scientists internationally. This includes three members of the Institute of Electrical and Electronics Engineers (IEEE Fellow), all of whom have been selected for Stanford University's global top 2% list of influential scientists, both in the lifetime impact rankings and annual scientific impact rankings. In addition, as of June 30, 2024, Teslink's R&D personnel account for 52.2% of the total number of employees.

Under the support of a top research and development team, Teslink's technology has rapidly iterated over the past decade. From the AIoT 1.0 stage of device-as-a-service, to the AIoT 2.0 stage of solution-as-a-service, then to the AIoT 3.0 stage of city-as-a-service, and now to the AIoT 4.0 stage of empowering industrial intelligence with large models. Teslink's development process reflects its profound accumulation and constant innovation spirit in the AIoT field, and has built a solid moat.

Founded on the original AIoT technology, Teslink has independently developed the AIoT operating system, TacOS, and built a full-stack AIoT technology product system. Around TacOS, Teslink provides full-stack AIoT products (including software, hardware, and services) to enterprises, public domain managers, and other public domain participants. According to the report from Zhuoshi Consulting, TacOS introduced by Teslink is one of the earliest public domain AIoT operating systems supporting full-scene applications in Asia.

Reportedly, TacOS can effectively address the core pain points in the AIoT industry, solving issues such as massive IoT device connections, cross-scene control and scheduling, unified development of multiple applications, providing a solid foundation platform for Teslink's implementation and operation in various smart scenarios in the public domain, and also offering an extended application platform for other fields of industrial intelligence. It is worth noting that Teslink continues to promote the construction of AIoT industry standards. As of June 30, 2024, the company has contributed to the development of 1 international and 34 domestic authoritative industry standards.

Gaining favor from star capital, valuation rising

As a unicorn in the public domain AIoT industry, Teslink has broad development prospects and has thus gained favor from many star capital investors.

According to the Wise Finance APP, since its establishment in 2015, Teslink has completed a total of 9 rounds of financing with a total scale exceeding 5 billion yuan. On April 9, 2024, Teslink announced the completion of a D round of 2 billion RMB financing delivery, also the largest D round financing in the country at that time.

Before Teslink went public, multiple rounds of financing attracted investments from VC/PE, institutional or financial investment companies or individuals, and artificial intelligence investments. These include: AL Capital, IDG Capital and other foreign funds, citic-backed industrial capital, SenseTime, jd.com, iflytek co.,ltd., Suning private equity fund, gemdale corporation and other industrial funds, Everbright, Futian Capital, Sany Heavy Industry Co., Ltd., Nam Cheong government platform company, Xuzhou Industrial Fund, North China Construction Group and other well-known domestic and foreign platforms and institutions.

After attracting investments from various star-studded funds, Teslink's valuation continues to rise. In August of this year, as one of Teslink's Pre-IPO investment institutions, the Hong Kong-listed company Microware announced that the company has signed a strategic cooperation framework agreement with Teslink, investing 50 million yuan in Teslink, accounting for 0.24% of the total shares. Based on this calculation, Teslink's valuation in this round is approximately 21 billion yuan.

According to Wind data, in the first half of 2024, the total fundraising amount of 29 main board IPO companies in the first half of the year in Hong Kong was 11.02 billion Hong Kong dollars, compared to 17.8 billion Hong Kong dollars last year, a year-on-year decrease of approximately 38.1%. Among them, the largest IPO in terms of fundraising size was Teamindao, with a total fundraising of 2.586 billion Hong Kong dollars. Therefore, Teslink, which plans to raise more than 5.6 billion Hong Kong dollars, can be said to be a bright spot in the Hong Kong IPO market this year.

It is worth noting that Teslink's valuation increase does not rely solely on funding. The company plans to use the funds raised from the IPO to strengthen its core business capabilities, thereby driving long-term sustainable growth in performance and providing effective support for its valuation.

The prospectus shows that Teslink plans to use the funds raised from the IPO to enhance its research and development capabilities, especially investing in TacOS, Green Intellisense, and large-scale model research and development; it will also be used for commercialization and market expansion, including developing new scenario applications and enhancing commercial capabilities, expanding the domestic sales team and increasing market penetration, expanding overseas layout, and strengthening the ecosystem; at the same time, it will be used to seek strategic investment and acquisition opportunities to advance the company's AIoT plan in the digital field and enhance overall competitiveness; the rest will be used as working capital and for general corporate purposes.

According to Zhitong Finance APP, with its technological innovation in the AIoT field, market recognition, strong capital support, and active international expansion strategy, Teslink has become a pioneer and leader in the Chinese public domain AIoT industry. It can be expected that after Teslink goes public, leveraging the power and advantages of the capital market, it will further consolidate its leading position in the broad AIoT track, firmly grasp new market opportunities, contribute a 'Chinese solution' to the global digital industry, and create substantial investment returns for investors.