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PostsMobvoi: the only profitable AIGC stock, subscribe now!
Last year, the preview of OPEN AI's text-to-video feature amazed the world, and concepts like AIGC became a global sensation overnight, emerging as the new trend!
Currently, there's a new AIGC stock in the Hong Kong market during its IPO phase, named Mobvoi$MOBVOI(02438.HK)
After reviewing the prospectus, Mobvoi seems more reliable than SenseTime$SENSETIME-W(00020.HK), the former AI leader, and its financial performance is solid!
1. The Only Profitable AIGC Stock
Mobvoi is an AI company founded in 2012, focusing on voice interaction and software-hardware integration.
According to a report by CIC, Mobvoi is one of the few AI companies in Asia capable of building general large models and one of the earliest and highest-revenue AI companies specializing in AIGC technology.
While SenseTime's profitability remains uncertain, Mobvoi has already achieved profitability!
In terms of revenue structure, Mobvoi's AI software revenue grew from RMB 60 million in 2021 to RMB 343 million in 2023, a year-on-year increase of 140%, with its revenue share surging from 15.0% in 2021 to 67.7%.
The AI software business revenue can be divided into two parts: AIGC system solutions and AI enterprise solutions.
From 2021 to 2023, Mobvoi's AIGC revenue reached RMB 6.822 million, RMB 39.857 million, and RMB 118 million, with a compound annual growth rate exceeding 300%.
Meanwhile, the company achieved gross margins of 37.5%, 67.2%, and 64.3% from 2021 to 2023.
The company turned profitable in 2022, with adjusted net profits positive in both 2022 and 2023. In other words, Mobvoi has become a self-sustaining large-model company.
In contrast, SenseTime is still struggling with profitability, with no light in sight!
2. Continued High R&D Investment
As a high-tech AI stock, R&D is a critical expense that cannot be skimped on.
From a long-term development perspective, Mobvoi has maintained high R&D investment over the years, with R&D expenditures of RMB 92 million, RMB 119 million, and RMB 155 million from 2021 to 2023.
As of April 8, 2024, Mobvoi's R&D team accounted for 54.8% of its total workforce. By the same date, the company had obtained 681 AI-related intellectual property rights, including 593 approved AI-related patents and 88 AI software copyrights.
In this regard, SenseTime has started to lag. In 2023, SenseTime significantly reduced R&D expenses but still couldn't stop its losses from widening.
3. The Industry Is Still Growing Rapidly, with Concentration as the Main Logic
From a market perspective, driven by AI development, China's AIGC market has grown from RMB 100 million in 2020 to RMB 400 million in 2022, with a compound annual growth rate of 100.8%. The market size is expected to reach RMB 32.6 billion by 2027. According to CIC, the total addressable market for China's AIGC sector is projected to exceed RMB 100 billion by 2027.
The mainstream view is that ecosystem-based AIGC high-tech products have significant growth potential, and market share concentration toward leading companies will be a key industry trend.
4. Some Shortcomings
This year's new listings all have their weaknesses, and Mobvoi is no exception.
First, its cash reserves are low, and second, it has high customer concentration.
Currently, Mobvoi has only RMB 147 million in cash, which is relatively low and indicates a weak financial foundation.
Fortunately, the company has turned profitable in the past two years, with positive cash flow for two consecutive years. Combined with the funds raised from the IPO, it doesn't face the same risks as SenseTime!
The second issue is high customer concentration, mainly in the AI enterprise solutions segment, with Volkswagen being the major client.
However, from a revenue perspective, the company's AI enterprise revenue is gradually declining, while AIGC is becoming the new growth engine, reducing the impact of this customer concentration issue!
5. Conclusion
Thanks to trending concepts like AIGC, Mobvoi's IPO subscription is hot. Rumor has it that on the first day of the offering, the institutional placement was already fully subscribed.
Given the current IPO frenzy, the subscription strategy is more aggressive than usual. Therefore, I will choose to subscribe!
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