With the convergence of AI and the Internet of Things, known as AIoT, facilitating interactions between the physical world and the digital realm, the digitalization and intelligence of industries have become a possibility. According to a report by China Insights Consultancy, driven by strategic layout and large-scale investment in digital infrastructure, China has become one of the fastest-growing countries in the global AIoT industry. The revenue of China's public sector 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 growth rate of the global market.
Against this backdrop, AIoT company Tecent AIoT officially submitted its application for listing on the main board of the Hong Kong Stock Exchange on September 26th, and is expected to become the first domestic AIoT stock in the near future. As a pioneer and leader in China's public sector AIoT industry, Tecent AIoT is poised to leverage the power of the capital market to write a new chapter for the future of China's AI technology in reshaping industries and sustainable urban development.
After a decade of honing its craft, Tecent AIoT has become a unicorn in the public sector AIoT industry. Established in 2015, Tecent AIoT has been focused on the integration and innovation of AI and IoT technologies from its inception, committed to reshaping future industries and sustainable urban development with AI technology.
Advertisement
As one of the top five platform companies in China's AIoT field driven by OS, Tecent AIoT's business focuses on four major directions: AI industrial digitalization, AI urban intelligence, AI smart living, and AI smart energy. With AIoT technology and the capability of delivering integrated hardware and software products, Tecent AIoT has achieved large-scale commercial deployment of AI applications, with the number of 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 were 161, 175, 193, and 89, respectively.
With the continuous growth in the number of customers, Tecent AIoT's business scale has expanded rapidly. In 2023, Tecent AIoT achieved a revenue of 1.006 billion yuan, with a year-on-year increase of 36.3%; among them, the revenue from AI industrial digitalization, AI urban intelligence, and AI smart energy increased by 32%, 47%, and 151.3% year-on-year, respectively. In terms of business structure, in 2023, about 62% of Tecent AIoT's revenue came from AI industrial digitalization business, an increase of about 11 percentage points from 2021, and AI urban intelligence accounted for 22.3% of the company's revenue.
Tecent AIoT's full-stack public sector AIoT products have gained high market recognition in China and globally. As of June 30, 2024, Tecent AIoT's products have been deployed by more than 800 customers from 150 cities worldwide, with business covering markets in China, the United Arab Emirates, Singapore, and Australia; as of the same date, Tecent AIoT had orders on hand worth about 2 billion yuan, and is expected to become one of the earliest profitable AI companies.
The rapid expansion of Tecent AIoT's business scale and the steady improvement of its international level are mainly due to the company's R&D team, which consists of world-class engineers and scientists, including three IEEE Fellows, who have all been selected for the lifetime impact ranking and the annual scientific impact ranking of the top 2% of scientists worldwide published by Stanford University. In addition, as of June 30, 2024, R&D personnel accounted for 52.2% of Tecent AIoT's total employee count.
With the support of a top R&D team, Tecent AIoT's technology has rapidly iterated over the past decade. From the AIoT 1.0 phase of device-as-a-service, to the AIoT 2.0 phase of solution-as-a-service, to the AIoT 3.0 phase of city-as-a-service, and to the current AIoT 4.0 phase of large model empowerment of industrial digitalization. Tecent AIoT's development journey reflects its profound accumulation in the AIoT field and its spirit of continuous innovation, and has built a deep moat.
Based on the origin of AIoT technology, Tecent AIoT has independently developed the AIoT operating system TacOS and built a full-stack AIoT technology product system. Centered around TacOS, Tecent AIoT provides enterprises, public sector managers, and other public space participants with full-stack AIoT products (including software, hardware, and services). According to the China Insights Consultancy report, the TacOS launched by Tecent AIoT is one of the earliest public sector AIoT operating systems in Asia to support full-scenario applications in public spaces.It is reported that TacOS can effectively address the core pain points of the AIoT industry, solving issues such as large-scale IoT device connection, cross-scenario control and scheduling, and unified development of various applications. This provides a solid foundation platform for the implementation and operation of various smart scenarios in the public domain for TESLA, and also offers an expanded application platform for other digitalization fields. It is worth noting that TESLA continues to promote the construction of AIoT industry standards. As of June 30, 2024, the company has assisted in formulating 1 international and 34 domestic authoritative industry standards.
Favored by star capital, valuation soars
As a unicorn in the public domain AIoT industry with broad development prospects, TESLA has attracted the favor of many star capitals.
Since its establishment in 2015, TESLA has completed 9 rounds of financing, with a total scale exceeding 5 billion yuan. On April 9, 2024, TESLA announced the completion of a D-round financing of 2 billion yuan, which was also the largest D-round financing in China at that time.
TESLA's multiple rounds of financing before going public attracted investments from VC/PE, strategic investors or financial investment companies or individuals, and artificial intelligence investments. These include foreign funds such as AL Capital and IDG Capital, industrial capital such as CITIC's industry capital, SenseTime, JD.com, iFLYTEK, Yangming Equity Investment Fund, and Gemdale Group, as well as well-known domestic and foreign platforms and institutions such as China Everbright, Futian Capital, Chongqing Science and Technology Holdings, Nanchang government platform company, Xuzhou Industrial Fund, and Beijing Science and Technology Construction Group.
After obtaining shares from various star capitals, TESLA's valuation level continues to rise. In August of this year, as one of the Pre-IPO round investment institutions of TESLA, the Hong Kong-listed company Megawatt announced that the company signed a strategic cooperation framework agreement with TESLA, investing 50 million yuan in TESLA, accounting for 0.24% of the total share ratio. According to this calculation, the valuation of TESLA in this round is about 21 billion yuan.
According to Wind data, in the first half of 2024, the total fundraising amount of 29 mainboard IPO companies in the Hong Kong stock market in the first half of the year was 11.02 billion Hong Kong dollars, a year-on-year decrease of about 38.1% compared to 17.8 billion Hong Kong dollars last year. Among them, the largest single IPO fundraising was Chabaido, with a total of 2.586 billion Hong Kong dollars. In this way, TESLA, which plans to raise more than 5.6 billion Hong Kong dollars, can be said to be a bright spot in this year's Hong Kong stock market IPO.
It should be noted that TESLA's valuation increase does not rely solely on capital-driven factors. The company plans to use the funds raised from the listing to strengthen its core business capabilities, thereby driving long-term sustainable growth in performance and effectively supporting the valuation.
The prospectus shows that TESLA plans to use the funds raised from the listing to enhance R&D capabilities, especially to invest in the R&D of TacOS, green intelligent computing bodies, and domain large models; it will also be used for commercialization and market expansion, including the development of new scenario applications and the improvement of commercialization capabilities, the expansion of the domestic sales team and the improvement of market penetration, the expansion of overseas layout, and the strengthening of the ecosystem; at the same time, it will be used to seek strategic investment and acquisition opportunities to promote the company's AIoT plan in the field of digitalization and enhance overall competitiveness; the rest will be used for operating funds and general corporate purposes.
With its technological innovation in the AIoT field, market recognition, strong capital support, and active international expansion strategy, TESLA has become a pioneer and leader in China's public domain AIoT industry. It can be expected that after TESLA goes public, it will rely on the strength and advantages of the capital market, further consolidate its market leading position in the vast AIoT track, firmly grasp new market opportunities, contribute the "Chinese solution" to the global digitalization industry, and create substantial investment returns for investors.
Leave A Reply