Company Profile

$重庆特斯联智慧科技股份有限公司(24082.HK) was founded in 2015, focusing on AI + IoT (AIoT) technology, targeting five core scenarios: buildings, communities, parks, cities, and carbon neutrality. The company's main products include AI CITY, TacOS platform, AIoT platform, and smart terminals. Its products and solutions are widely used in smart commerce, smart hospitals, smart campuses, and smart buildings, serving clients in over 160 cities globally, including enterprises and public sector participants. The company is committed to driving urban management upgrades and fostering industrial ecosystem prosperity. The sponsors for this IPO are CITIC Securities and Haitong International.

Financial Status

1. Revenue

Revenue grew consistently over three years, reaching RMB 738 million, RMB 1.006 billion, and RMB 1.843 billion, respectively, driven by:

• Stable growth in the highest-revenue AI digitalization business: RMB 472 million, RMB 624 million, and RMB 1.641 billion, accounting for 89% of revenue in 2024.
• Recovery in government and corporate orders (194 new clients in 2023, up 10.9% from 175 in 2022).
• Overseas market expansion (covering 160 cities globally with 800+ clients, including UAE and Singapore).

2. Profit

The company reported net losses of RMB 2.39 billion, RMB 800 million, and RMB 2.1 billion, with gross margins of 10.1%, 31.0%, and 15.3%, respectively.

Improved revenue in 2023 was due to:

• Gross margin rising to 31.0%, driven by higher-margin software and services. AI digitalization business (34.4% gross margin) and AI city intelligence business (27.1% gross margin); software revenue share increased from 7.7% to 39.8%.
• Cost optimization: Sales expenses dropped from 25% to 13%, and R&D expenses fell from 44.6% to 32%.
• Reduced non-cash losses. In 2022, fair value changes of preferred shares had a significant impact, with losses up to RMB 1.3 billion, due to market valuation changes in the AIoT sector affecting book value. In 2023, this narrowed to RMB 114 million, with post-Series D valuation stabilizing around RMB 20 billion.

Expanded net loss in 2024 was due to:

• Gross margin dropping to 15.3%, due to competitive pricing strategies, U.S. chip export restrictions increasing procurement costs, and a sharp decline in high-margin software revenue share to 8.3% (from 39.8% in 2023).
• Fair value changes of preferred shares. Impact was RMB 114 million in 2023 and RMB 531 million in 2024, likely due to valuation changes post-Series D financing (RMB 2 billion raised in April 2024, valuing the company at RMB 21.6 billion).
• Share-based compensation (RMB 574 million in 2024 vs. RMB 73 million in 2023), mainly from employee equity incentives.

3. Cash Position & Debt Structure

• Cash decreased by 14.1% to RMB 158 million in 2024. At the current annual loss rate (RMB 2.1 billion), without additional financing, this would cover only 3-6 months.
• Operating cash flow remained negative for three years. Inventory grew 55% to RMB 979 million in 2024 due to increased AI infrastructure hardware stock. Inventory turnover days improved to 255, 192, and 98 days.
• High short-term debt pressure. The 2024 current ratio was 0.67, far below peers like Hikvision (1.8) and Dahua (1.6).

Company Strengths

1. Full-Stack AIoT Technology with Industry-Leading Hardware-Software Integration

TSL's "model + system + hardware" full-stack capability is rare in the AIoT industry, covering AI models (e.g., economic and energy models), intelligent computing infrastructure (e.g., green computing systems), and robotics (e.g., Titan series).

2. Strong Revenue Growth, Outpacing Peers; RMB 2.3 Billion Backlog Ensures Future Revenue

TSL is one of the fastest-growing AI companies, with 83.2% revenue growth in 2024, far exceeding peers like SenseTime. TSL has a robust order backlog of RMB 2.3 billion as of end-2024, and growing client numbers (224 in 2022 to 342 in 2024) ensure future revenue.

3. Industry-Leading Operational Efficiency with Faster Receivables Turnover

TSL's capital turnover efficiency far exceeds peers, with accounts receivable turnover days improving from 238 to 180 to 104 days, reflecting a mature business model and stronger collections.

4. Leading Global Expansion, Capturing Trillion-Yuan Smart Market

TSL is among the few Chinese AI companies expanding overseas, entering markets like the Middle East and Southeast Asia, with significant growth potential.

Risks

1. High Customer Concentration: Top 5 Clients Contribute 70.6% of Revenue with Low Stickiness

From 2021-2024, TSL's top 5 clients rarely repeat (only affiliate Chongqing TSL High-Tech appeared in 2023 and 2024H1), indicating reliance on one-time clients and unstable relationships.

2. Unstable Financials: Persistent Heavy Losses / Plummeting Margins / High Liquidity Risk

• Cumulative losses of RMB 5.29 billion over three years, with cash dwindling to RMB 158 million by end-2024;
• In 2024, TSL admitted to "low-price competition" to capture AI infrastructure market share, pressuring margins;
• 2024 total assets (RMB 415 million) were below current liabilities (RMB 420 million), indicating extreme leverage.

Industry Outlook

• CIC reports show China's AIoT market growing faster than global, reaching RMB 1.2 trillion by 2025, driven by policy support (e.g., "Intelligent Connectivity" strategy) and corporate digital transformation.
• Public-sector AIoT (e.g., smart cities, industrial digitalization) grows faster (12.8% CAGR). TSL focuses here, with vast market potential.

Major Investors