In 2024, it is the &#34;Year of the Outbreak of AI Large Model Applications&#34;. Digital technology led by artificial intelligence and large models will bring about a profound transformation to various industries, and will also become a key factor in leading many industries in China to achieve &#34;breaking and establishing&#34;. As the curtain of the interim report season slowly opens, the market is facing a real test. AI companies that truly master core technologies and possess practical commercialization capabilities are expected to stand out.
On August 26, AINNOVATION (02121) released its 2024 interim financial report. The financial report shows that in the first half of 2024, AINNOVATION achieved revenue of RMB 572 million, a decrease of 38.12% year-on-year; adjusted net loss was RMB 37.408 million, a decrease of 5.01% year-on-year; and loss per share was RMB 0.36.
At first glance, this may not seem like a very good financial report based on the &#34;on-paper data&#34;, but upon closer examination, investors can expect to get a different answer than their initial impression. For example, looking at revenue, the decline in revenue is mainly due to strategic changes, product refinement, and business adjustments—over the past six months, AINNOVATION has focused on optimizing products and operations, as well as improving operational efficiency, continuously investing in refining product depth to enhance competitive advantages and lay a foundation for future growth.
From a financial perspective, more important than narrowing losses is the continuous improvement of gross profit margin to 33.8% within the year, an increase of 1.4 percentage points year-on-year, which is a strategic progress; more worthy of attention than profit indicators is operating cash flow, which significantly improved by 76.8% compared to the same period last year; in addition, the company has also taken prudent cost control measures during the period, building a sustainable and robust business model, aiming for stability and long-term development.
This means that in a volatile market, AINNOVATION is able to maintain stability while entering a stage of high-quality development. We can indeed gain insights into the company's true situation from this financial report.
<h2>Strategic Focus on High-Quality Revenue, Financial Stability and Structural Optimization</h2>
According to Intelligent Finance APP, as a leading domestic manufacturer that was the first to bet on &#34;AI + manufacturing&#34; solutions, AINNOVATION adheres to a strategy of continuous pragmatism and long-term development, deepening its differentiated competitive advantages, actively responding to market challenges, and enhancing its technological products and business operational capabilities.
However, influenced by the current market environment, some of AINNOVATION's industry clients are facing cyclical pressures and operational challenges, leading to more cautious spending. Therefore, in the first half of 2024, the company proactively optimized its business structure and adjusted its growth strategy. Its fundamentals continue to maintain a positive development trend: during the period, AINNOVATION strategically scaled back its OLED panel semiconductor manufacturing and financial services businesses, with revenue from manufacturing reaching RMB 440 million, accounting for 76.5% of total revenue, an increase of 15.8 percentage points year-on-year.
Furthermore, the company has vigorously strengthened internal management practices and cost reduction efforts. During the period, the expense ratio stabilized and improved, with total expenses for sales and distribution, general and administrative expenses, and research and development expenses decreasing by 35.8% year-on-year. Benefiting from improved research and development efficiency and effective control of research and development expenses, AINNOVATION continued to invest RMB 148 million in research and development, with a research and development expense ratio exceeding 20%, laying a solid foundation for the future
In the complex and ever-changing market environment, AINNOVATION actively manages its balance sheet and has made substantial progress in strengthening fund turnover management and optimizing resource allocation. The net cash used in operating activities improved by 76.8% compared to the same period last year, decreasing to 25.9 million RMB. At the same time, the company strengthened business receivables management, with the net value of accounts receivable and notes payable in the first half of 2024 significantly decreasing by 36.9% compared to the end of 2023. As of June 30, 2024, the Group's cash and cash equivalents were approximately 1.333 billion RMB, with a good financial condition, sufficient cash reserves, and accumulating energy for its future long-term transformation and high-quality development.
<h2>Focusing on the &#34;AI + Manufacturing&#34; Differentiated Track to Enhance Development Advantages and Certainty</h2>
With the rapid rise of the concept of intelligent manufacturing, the manufacturing industry is undergoing a comprehensive transformation. In this wave of transformation, the application of artificial intelligence is beginning to permeate every aspect of the manufacturing industry. As of now, the transformation and upgrading of the manufacturing industry towards high-end, intelligent, green, and digitalization undoubtedly remains a high certainty and high prosperity technological development trend.
As a leading provider of &#34;AI + Manufacturing&#34; solutions in China, AINNOVATION has embraced change based on AI 1.0, delved deep into enterprise pain points, launched the &#34;AInnoGC Industrial Big Model&#34; technology platform and AIGC application matrix, and empowered key business processes by providing truly implementable generative AI solutions and applications for the manufacturing industry.
By 2024, AINNOVATION's core products have undergone new iterations and breakthroughs. During the period, AINNOVATION not only successfully promoted two generative AI applications, ChatBI and ChatDoc, and implemented them in multiple projects, but also upgraded and released the &#34;AInno-75B Industrial Big Model&#34; 2.0 version, as well as AIGC applications such as ChatVision for generative enterprise private domain visual insights, ChatRobot Pro for generative industrial robot scheduling, and ChatCAD for generative industrial design assistance.
It is understood that the AInno-75B Industrial Big Model 2.0 version has achieved a new breakthrough in terms of the number of parameters, exceeding 75 billion. This not only consolidates its capabilities in industrial knowledge Q&amp;A, data analysis, code generation, task scheduling, and more, but also further enhances its abilities in massive knowledge management, complex logical reasoning, long process task scheduling, Agent intelligence, and the generation of more industrial modalities.
Thus, the company has built a relatively complete industrial big model technology product matrix, focusing on &#34;Industrial Big Model + Industrial Software,&#34; &#34;Industrial Big Model + Industrial Robot,&#34; and &#34;Industrial Big Model + Industrial Vision.&#34; This not only meets the intelligent needs of enterprises in multiple scenarios and dimensions but also continuously improves and upgrades the industrial big model technology and product system, driving the transformation of the manufacturing industry.
As a leader in the AIGC application track, this milestone event for AINNOVATION not only highlights its leading position in the field of industrial big models but also demonstrates its firm determination to promote the commercialization of industry + artificial intelligence. Through innovation-driven efforts, the company can leverage its industry-leading data assets, AI algorithm models, rich industry experience, professional insight capabilities, as well as technological innovation and technology transfer capabilities to continuously enrich the variety of products and services, providing comprehensive empowerment for the digital transformation of China's manufacturing industry
Currently, based on the actual needs of manufacturing industry customers, AINNOVATION has defined five major business segments: industrial software, data intelligence software, industrial logistics, intelligent equipment, and industrial sustainability. The company deeply embeds the MMOC artificial intelligence technology platform and AInnoGC industrial large model technology platform into industry applications to support the practical implementation of artificial intelligence in multiple segmented industry fields.
Specifically, in the industrial software field, the company implements a productization strategy of &#34;AI+MOM&#34;, deeply integrating artificial intelligence technology into the existing MOM core product system. It has built an artificial intelligence practice and application system based on the AInnoGC large model technology matrix, successfully commercializing and replicating within the industry. This has assisted multiple enterprises in improving production efficiency and operational management precision.
In the data intelligence software field, the company promotes the application of AI technology and data solutions, tailoring intelligent data governance solutions for customers. Through the knowledge understanding capability of ChatDoc and the data analysis capability of ChatBI, it has achieved intelligent inventory and management of data assets, effectively enhancing the efficiency and accuracy of data governance.
In the industrial logistics field, AINNOVATION continues to advance the digitalization development strategy of &#34;smart logistics in the steel industry&#34;. Several industry-first applications have been successfully implemented: the first &#34;iSmartCSU continuous ship unloader intelligent operating system&#34;, the first mining track transport automatic driving system entering the debugging stage, the first AI+5G new energy pure electric locomotive intelligent hardware transformation nearing completion, and the first open-top tank intelligent molten iron transport achieving basic unmanned driving.
In the intelligent equipment field, the company pioneers the combination of large model technology with AINNOVATION's traditional strengths in intelligent quality inspection solutions. The service scope has expanded to cover the full value chain system of model production, model management, quality inspection application construction, and intelligent analysis of quality inspection results. By introducing industrial Internet platforms and large model technology, it has successfully built an efficient, intelligent automotive equipment conveying demonstration line, achieving the digital management of the automotive equipment industry.
Furthermore, in the industrial sustainability field, AINNOVATION is committed to using artificial intelligence technology to support the integration of production, education, and research. It has established smart manufacturing training centers and intelligent robot centers in locations such as Chongqing and Chengdu, combining machine vision technology, video intelligence technology, large model technology with industrial robot control, operation management of industrial robot training platforms, and safety management of industrial robot training platforms. It actively explores innovative applications of intelligent industrial robots.
From an industry perspective, large model technology in the industrial sector is not simply about applying large models, but innovatively combining large model technology with industrial data and business scenarios. Industrial applications are complex and detailed, and although many companies have begun exploring and implementing large model applications, there are significant challenges in applying large models to specific industrial scenarios.
In response, AINNOVATION chooses to continuously explore and push the boundaries of technology to provide a continuous source of power for industrial intelligence. It is this innovative ability and continuous dedication that enables the smooth advancement and implementation of large model products in the industrial sector, achieving efficient, intelligent, and sustainable development in industrial production
In recent years, AINNOVATION has always attached great importance to research and development investment to ensure technological leadership. As of June 30, 2024, the company has accumulated 1,326 patent applications, including 1,079 invention patents, accounting for a high proportion of 81.4%; and 583 utility model patents, including 361 invention patents.
In the trustworthy AI industrial large-scale model evaluation by the China Academy of Information and Communications Technology, AInno-75B became the first in the industry to pass the evaluation, achieving the highest rating (4+) currently. In the SuperCLUE industrial large-scale model benchmark evaluation, Qizhi Kongming industrial large-scale model ranks first domestically and in the outstanding leader quadrant. Additionally, the company actively participates in the formulation of industrial large-scale model standards, and has been certified as the core authoring unit of industrial large-scale models by the Ministry of Industry and Information Technology's key laboratory for artificial intelligence key technologies and applications, representing high recognition of its technology by the industry, market, and authoritative institutions.
From a policy perspective, in recent years, the National Development and Reform Commission has issued policies to vigorously develop AI for several consecutive years. In July of this year, the State-owned Assets Supervision and Administration Commission of the State Council stated that it will fully implement the &#34;AI+&#34; special action, encouraging central state-owned enterprises to achieve intelligent transformation of production processes with the assistance of AI technology, providing the market with more competitive products and services. It is evident that AI technology has become a core force leading the new generation of industrial transformation.
At the current point in time, the consensus in the industry is that large-scale models have been widely applied in the industrial field. With the continuous deepening of AI applications, it is believed that AINNOVATION is also expected to further enhance its core strengths through this opportunity, thereby increasing development certainty. In the future, the company's continued investment in innovation is expected to translate into the growth potential of the enterprise in the near future. It can be foreseen that as its product matrix and commercialization of achievements follow, the company is expected to experience a leap in value, making it worthy of long-term investor attention

02121

AINNOVATION released its 2024 interim financial report on August 26th, with revenue of 572 million RMB, a year-on-year decrease of 38.12%. Despite the seemingly poor report, it actually reflects the company's efforts in strategic transformation and product optimization. The gross profit margin increased to 33.8%, and operating cash flow improved by 76.8%, demonstrating its robust financial structure and high-quality development direction. The company will continue to deepen its differentiated competitive advantage, focusing on "AI+ Manufacturing" solutions

Steady transformation accelerates realization, AINNOVATION speeds up leading the golden track of industrial large models