The company is a leading professional provider of training data in China. Established in 2005, Haitian AAC is mainly engaged in the R & D, design, production and sales of training data, which is applied to the development and training of artificial intelligence algorithm models. it covers many core fields such as intelligent voice, computer vision and natural language, and serves a variety of application scenarios such as human-computer interaction, intelligent driving, smart city and so on. At present, the company has more than 500 customers, covering major large technology companies (BABA, Tencent, etc.), artificial intelligence enterprises (iFLYTEK, Haikangwei, etc.) and scientific research institutions (Chinese Academy of Sciences). In 2020, the company's operating income was 230 million yuan, and the gross profit margin and net profit margin were 67.70% and 35.17%, respectively.
The market scale of AI basic data services is increasing steadily, and brand data service providers may be dominant in the future. Algorithm, computing power and data are the three core elements of technological development in artificial intelligence industry chain, and training data is the basis of the development of algorithm model. In 2019, the size of China's AI basic data market reached 3.09 billion, and it is expected to exceed 10 billion yuan in 2025, with a compound annual growth rate of more than 20%. In the subdivision requirements, image data requirements account for nearly half. China's AI data service market participants include academic institutions, the government and other neutral institutions, demand-side self-built basic data teams, basic data service providers. In 2019, data providers accounted for nearly half of the basic data service providers, and the market share of the top five companies represented by the company exceeded 1amp 4.
With the raising of the business threshold and the diversification of customer needs, small and medium-sized data providers may be facing business difficulties. IResearch data shows that the share of small and medium-sized data providers in 2019 is 20.8% smaller than expected. This part will be transferred to the brand data service provider and the demand-side self-built data team at 7:3.
The company has been deeply engaged in the basic data service industry for many years, with dominant market share, technical strength and talent reserve. The company is one of the earliest basic data service companies in China, has accumulated rich experience in the industry, provided high-quality data products and customized services for downstream customers, and won the recognition of many large and high-quality customers, such as BABA, Tencent, Baidu, Inc. and so on. at present, it ranks among the top five in the domestic market share and has a strong competitive advantage in brand efficiency and business ability. Compared with comparable companies, the company's revenue is weaker than Appen, but it is better than Huitang Technology and Standard Bay Technology in the coverage of languages / dialects covered by training data and the reserve of finished training data sets. The company has actively studied the core technology and trained excellent talents in the industry. the technology spans the three major fields of basic research, platform tools and training data production, and has become an important support for the company to provide related products and services.
Raise funds to help the company develop. The company issued 10.7 million shares of the company, with a total amount of 395 million yuan actually raised, which is mainly used for projects such as independent research and development of data products, upgrading of integrated data processing technical support platform, upgrading of R & D center, etc., expanding the scene and areas covered by the company's training data products, improving the company's service efficiency and enhancing its core competitiveness.
Profit forecast, valuation. We estimate that the company's operating income will grow by 8.1%, 16.7% and 20.6% respectively from 2021 to 2023, and its net profit will grow by 1.3%, 19.2% and 24.6% respectively, and its EPS will be 1.94,2.32,2.89 yuan respectively. In terms of valuation, comparable companies include Appen, Huitang Technology, Standard Bay Technology and so on. Among them, Huixing Technology and Standard Bay Technology are not listed, and Appen is an Australian listed company. Appen2020's fiscal year revenue was A $600 million, net profit was A $5051 million, and its market capitalization on August 11 was A $1.524 billion, which makes PE (2020) about 30 times. At present, there is still a big gap between the company's revenue volume and Appen, but the net interest rate is much higher than Appen. Considering the company's technical and market advantages in the AI basic data industry, we give the company 30 times PE in 2021, corresponding to a target price of about 58.2 yuan per share.
Risk hint: there is uncertainty in the promotion process of fund-raising projects and intensified competition in the industry.