Graffiti intelligence "survive in Hong Kong", it is difficult to save saving the sluggish performance

Wen | Ningwen

After the double listing, graffiti intelligence still has no "white knight".

On July 5, 2022, graffiti intelligence landed on the Hong Kong Stock Exchange in a dual major listing. The issue price was 19.3 Hong Kong dollars/share. Closing on July 11, the stock price of graffiti intelligence is still HK $ 19.3/share.

Picture source: Baidu

Graffiti intelligence chooses to go public in Hong Kong, which does have a certain connection with the continuous pressure of Chinese stocks. On May 4, 2022, SEC included graffiti intelligence in "identified issuers", which means that it will face the risk of delisting.

However, combined with the financial data and business models of graffiti intelligence, its main business has shrunk and the new business stamina is weak, making US stock investors discouraged, and it may also be a major cause of landing on the Hong Kong Stock Exchange.

Losses amplified, the "troubles" of the intelligent growth of graffiti

Graffiti Intelligence describes that it is a software platform in the Internet of Things era in the "prospectus". Judging from the trend, graffiti intelligence established in 2014 undoubtedly caught up with a "golden age".

CMIC data shows that in 2013, the scale of China's IoT industry was 500 billion yuan, an increase of 36.9 % year -on -year. The Foresight Industry Research Institute once stated: "With the continuous launch of low power consumption and high -performance chips, 2014 will become the first year of the Internet of Things."

IoT Analytics data shows that in 2020, the number of global Internet of Things connections exceeded 11.3 billion, the first time surpassed the number of non -IoT connections. In 2021, the number of global Internet of Things connections will reach 12.3 billion, an increase of 8.85%. It is estimated that by 2025, the number of Internet Internet of Things will exceed 27 billion.

IoT, PaaS, Cloud services, graffiti intelligent aiming tracks, just take out one, all can be called trillions of blue sea. This is also the key to the intelligent attracting investors.

Official information shows that before the listing in 2021, Graffiti Intelligence completed a total of five rounds of financing, and there were no shortage of first -line investors such as GIC, Gaoma, Tencent, and other first -line investors. Among them, Tencent led the Doodle Smart D round of financing and is the second largest institutional shareholder of the latter.

Picture source: prospectus

However, unfortunately, after logging in to the capital market, graffiti intelligence failed to give investors a fertile return.

After landing in the New York Stock Exchange in March 2021, the stock price of Cadder Smart climbed to $ 27.5/share, with a market value of over 15 billion US dollars. Subsequently, the stock price of graffiti intelligence went down all the way. As of July 8th in the Eastern Time, the stock price of graffiti intelligence was only $ 2.38/share, the market value was only $ 13.32, and the market value was 90 %.

Picture source: Baidu

Graffiti's intelligent stock price continues to explore, perhaps directly connect with the sluggish financial data. According to the financial report, from 2019 to 2021, the revenue of graffiti intelligence was US $ 106 million, US $ 180 million, and $ 302 million; net losses were US $ 70.5 million, US $ 66.9 million, and $ 175 million. One hundred million U.S. dollars.

In Q1 in 2022, the smart revenue of graffiti was US $ 55.324 million, a year -on -year decrease of 2.7%, and the first revenue increased for the first time. The net loss was 54.953 million US dollars, a year -on -year increase of 36%. For four consecutive quarters, the losses of graffiti intelligence continued to lose a large loss.

However, it is worth noting that the continuous losses have indeed made graffiti intelligence occupy a pivotal position in the industry. According to the data of burning consulted, in 2021, according to income, graffiti intelligence has reached 14.9%in the market share of global smart homes and smart business IoT PAAS markets, ranking first.

Compared with the new energy vehicle industry, although several major head companies have continued losses, with their good sales and market share, the stock price has risen. Graffiti intelligence is also in the Chaoyang industry, and has achieved a certain first -mover advantage. Instead, the stock price has fallen endlessly, which may imply that its business model has a certain dilemma.

The business growth is bright, but the revenue pillar is sluggish

Although there are several major business lines such as the Internet of Things PaaS, SaaS, and intelligent equipment distribution, the revenue pillars of the smart revenue are still the IoT PAAS business. In Q1 in 2022, Graffiti's intelligent IoT PAAS business revenue was $ 41.8 million, accounting for 75.55%of revenue.

According to the financial report, in Q1 in 2022, SaaS and other business revenue of graffiti intelligence were US $ 5.8 million, an increase of 146.7%year -on -year; the revenue of intelligent equipment distribution business revenue was US $ 7.8 million, an increase of 63.9%year -on -year.

Although the growth rate of the above businesses is bright, the revenue of the Internet of Things PAAS business with smart graffiti has fallen 16.1%year -on -year.

The overall financial data of graffiti intelligence has a direct connection with the performance of the Internet of Things PaaS business, and the latter began to shrink, and it also determined that the overall financial data of graffiti intelligence is difficult to grow.

Graffiti intelligent IoT PAAS business has declined, not because of customer loss. According to the financial report, as of the end of March 2022, the number of Cadder Intelligent IoT PAAS business customers was 39 million, and the number of developers exceeded 580,000, an increase of 29%and 14.1%year -on -year.

Cross -comparative revenue data and customers can find that the consumption power of Cadre Intelligent IoT PAAS business customers is continuing to weaken. At the Q1 financial report in 2022, graffiti intelligence also stated: "Non -necessary consumer goods expenditure is adversely affected by high inflation, which has led to the continuous reduction of customers' payments."

At the same time, the operating expenses of graffiti intelligence are constantly rising. In Q1 in 2022, the research and development and management costs of graffiti intelligence were US $ 47.59 million and US $ 18.03 million, respectively, an increase of 37.1%and 12.3%year -on -year, and the total cost was US $ 78.3 million , Year -on -year increased by 21.1%. Picture source: Futu

Business costs are constantly rising. Although graffiti intelligence needs to continue to develop technology to attract customers, it is more important. It may also be related to the strong underlying cloud computing infrastructure of graffiti intelligence.

In the financial report, graffiti intelligence stated that the public cloud and private cloud services used by customers are from Amazon AWS, Microsoft Azure, Tencent Cloud, etc. In other words, graffiti intelligence is also a customer of cloud computing infrastructure suppliers who need to pay for the underlying cloud computing infrastructure.

At present, the contradiction in front of graffiti intelligence is to attract new customers and maintain existing customers, which requires higher costs, but the consumption power of customers has not increased. Therefore, graffiti intelligence can only accept the reality of losses.

Hong Kong stocks cannot save graffiti intelligence

The basic disk of stabilizing the Internet of Things PaaS business, and then expanding the new business model, in order to give investors confidence, and naturally it has become the most urgent heat task of graffiti intelligence at this stage. At present, graffiti intelligence is in the upstream infrastructure and the downstream SaaS business two directions.

As mentioned earlier, the underlying technology of graffiti intelligence depends on several cloud computing infrastructure suppliers such as Amazon, Microsoft, Tencent. Although the use of ready -made cloud computing infrastructure can make technology landing faster and serve more customers, but in the long run, not only will the graffiti be smarter, but it will also be subject to people. Facilities, developing corresponding products.

Some reasons for graffiti intelligent landing in Hong Kong stocks are to get rid of this dependence. The "prospectus" shows that graffiti intelligence is expected to raise about 70 million Hong Kong dollars in the listing of Hong Kong stocks. 30%of them, that is, HK $ 21 million, will be used to enhance the Internet of Things technology and infrastructure in the next five years.

However, cloud computing is an industry with heavy assets and long cycles. It needs to pay a great price in order to get a scale economy. Taking Tencent as an example, in the middle of 2020, Tang Daosheng, president of Tencent Cloud and Smart Industry Group, said that Tencent will invest 500 billion yuan in the next five years for new infrastructure such as cloud computing and servers. At present, the investment of graffiti intelligence in infrastructure is difficult to produce scale effects in the short term.

Picture source: financial report

In addition to trying to "throw" in infrastructure, graffiti intelligence is also trying to enhance the company's second largest business. The revenue proportion of SaaS business is "open source".

According to the financial report, in 2021, Graffiti SAAS and other revenue were 18.6 million US dollars, an increase of 203.0%year -on -year. In Q1 in 2022, SaaS and other revenue of $ 5.8 million, an increase of 146.7%year -on -year.

What's even more gratifying, compared to the Internet of Things PaaS business, the SaaS business has higher gross profit. The financial report shows that in the past, the gross profit margin of Graffiti's intelligent IoT PAAS business has been hovering around 40%, while the gross profit margin of SaaS business has been above 70%.

Although the growth rate and gross profit margin of graffiti intelligence SaaS business are extremely bright, overall, the business is not conspicuous in the overall revenue of graffiti intelligence. 6.15%and 10.49%, it is difficult to balance the losses of graffiti intelligence.

It is true that the SaaS business of graffiti intelligence is still growing rapidly. After this trend, it will indeed become a pillar of revenue for the smart and strong revenue of graffiti in the future.

However, the problem is, with the rapid growth of the relevant market, represented by Alibaba Cloud IoT, Tencent Cloud IoT, Huawei Cloud IoT, etc., the Internet giants that master the underlying cloud computing infrastructure have also made efforts.

For example, Alibaba Cloud IoT's intelligent solution easily covers multiple fields such as industrial manufacturing, commercial retail, and sharing economy; at the Huawei Partner and Developer Conference 2022, Huawei Cloud CEO Zhang Ping'an also said, "The next ten years will be SaaS development Ten years of gold. Huawei Cloud has always practiced 'everything service', creating the best platform for innovation in the cloud industry, and accelerating SaaS into thousands of industry. "

The Internet of Things track is extremely crowded, but the market is still extremely divided. According to China Merchants Securities, the top five downstream application scenarios of the Internet of Things are smart cities, industrial Internet of Things, health Internet of Things, smart homes, and Internet of Vehicles. Essence

Picture source: China Merchants Securities

According to the financial report, the current SaaS business of graffiti intelligence is only landing on the application scenarios such as commercial lighting, hotel/apartment and real estate/community, and overflows over the domestic market, with revenue accounted for more than 90%.

On the one hand, strong competitors such as Ali and Huawei are working hard. On the other hand, the SaaS business of graffiti intelligence only covers the limited market. In the future, the business has to face great challenges.

All in all, although the outlets such as IoT and cloud computing have been caught up, the problem that is currently placed in front of graffiti intelligence is that the core Internet of Things PaaS business is difficult to further increase their income. The SaaS business with a new growth pole requires strong competitors.

If on this basis, graffiti intelligence has positive financial data. The problem is that today's graffiti intelligence has fallen into the dilemma of the decline in revenue growth and continuous expansion of losses.This dual dilemma at the level of business and revenue is not solved by landing in the new capital market.

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