(30 March 2022, Hong Kong) Qingdao AInnovation Technology Group Co., Ltd (“AInnovation” or the “Company”, and its subsidiaries, the “Group”; stock code: 2121.HK) announced the annual results for the fiscal year ended 31 December 2021(the “Reporting Period”).
In 2021, the Group’s revenue reached RMB861.2 million, representing a year-on-year increase of 86.3%; its gross profit reached RMB267.2 million, representing a year-on-year increase of 98.5%; its gross profit margin was 31.0%, representing a year-on-year increase of 1.9 percentage points; Adding back the finance cost of financial liabilities of redeemable shares, share-based payment expenses and listing expenses etc., adjusted net loss was RMB141.8 million, adjusted net loss rate was 16.5%, representing a year-on-year decrease of 47.3%.
Steady operation strengthens competition barriers, customer growth drives profitability improvement
While attaining rapid revenue growth, AInnovation aims to achieve progress with stability. On the one hand, the Group adopted a more focused business strategy, and consolidated the business layout of “AI + Manufacturing” as the major business, followed by “AI + Financial Services”; on the other, the Group continued to implement the “1+N/1*N” market expansion model, which raised the repurchase rate of existing customers and expanded the incremental customer base.
In 2021, the number of customers of the Group reached 159, in which the number of premium customers, the customers with revenue contribution of RMB4.5 million or more in a fiscal year, has increased from 23 in 2020 to 42 in 2021. The repurchase rate of premium customers in terms of amount is 102.5%. While increasing customer number, with the improvement of economies of scales, increasing pricing power, and accumulation of more standardized products and solutions, profitability of the Group has improved. Not only has the overall gross margin achieved a year-on-year increase by 1.9 percentage points, loss control ability has also improved. Adjusted net loss rate achieved a year-on-year decrease by nearly 50% in 2021.
Rapid growth of “AI + Manufacturing”, strengthening the leading position in niche market
As an artificial intelligence enterprise rooted in China, AInnovation shoulders a corporate mission of “Empower Businesses with AI Technology”. Benefiting the dividend of the digital infrastructure era, AInnovation proactively grasps the development opportunities from the digitalization, networking and intellectualization of traditional industries, and continuously makes breakthroughs and innovations in the fields of “AI + Manufacturing” and “AI + Financial Services”, thus has achieved major strategic results in the fiscal year 2021.
In the Reporting Period, benefiting from the continuously focused corporate strategy, revenue from manufacturing industry reached RMB449.0 million, representing a year-on-year increase of 132.5%, which consists of 52.2% of the Group’s revenue. Revenue from financial services industry reached RMB274.1 million, representing a year-on-year increase of 49.4%, which consists of 31.8% of the Group’s revenue.
In 2021, AInnovation has successfully built the AInnovation Intelligent Manufacturing System (AIMS) based on the MMOC artificial intelligence platform, which injects AI capabilities into the daily operations of manufacturing companies, so as to help customers achieve intelligent transformation from the two dimensions including operational efficiency and information intelligence. AInnovation focuses on digging the value of sub-sectors such as iron and steel metallurgy, energy and power, panel semiconductors, automotive equipment, and intelligent data centers, and makes a number of classic cases about intelligent transformation in the industry.
Continuously increase R&D input, MMOC AI platform contributes to revenue and efficiency increase
AInnovation insists that technological innovation was the primary productive force, and continues to expand the scale of our technology R&D team, enrich and improve the MMOC artificial intelligence platform, and the number of patent applications reached a new high. As of 31 December 2021, the Group had a total of 259 technicians, accounting for 56.7%. AInnovation applied for a total of 634 AI-related patents, more than 90% of which were invention patents, and successfully registered 124 patents, and further applied for 112 new patents in 2021. Research and development expenses increased from RMB181.5 million in last year to RMB327.7 million, representing a year-on-year increase by 80.5%
The Group firmly takes the AI platform as its technical base, reuses technology assets, and creates full-stack AI-based solutions for customers. In order to better implement such strategy, the Group has introduced the Cloud platform on top of the original MMO platform in 2021. The Cloud platform offers better infrastructure capabilities for the MMO platform, forming an organic and unified MMOC artificial intelligence platform. Providing end-to-end technical supports for the innovation, R&D and delivery of AI solutions.
Building an AI solution based on the MMOC platform can shorten the pre-sales POC cycle and solution delivery cycle, reduce the skill requirements of delivery personnel, improve the business effect of the solution and the standardization of delivery tools/processes, and accumulate technology assets to achieve cross-project reuse. MMOC’s powerful platform capabilities have effectively supported the business side and delivery side to win more end-user orders, improve end-to-end delivery capabilities, reduce costs, increase profits and improve customer satisfaction and repurchase rates.
Hui Xu, Executive Director and CEO of AInnovation, said, “AInnovation has gone through the start-up stage of technology R&D and the stage of commercialization, and has come to the rapid business expansion stage. To sustain the growth momentum in 2021 and further strengthen our leading position in “AI + Manufacturing” sector, we will take benign sound growth and sustainability as ourguidelines, allocate resources from various aspects such as technologies, products, industries, engineering and commercialization, and promote the coordinated development and organic growth of the Group. More importantly, we will continue to increase technological innovation, strengthen operation and management, to provide better products and services to the customers, to contribute more value to the society and to bring better returns for the shareholders.”