"the first share of AI platform" cloud cong technology will have both joys and sorrows in 2023.

Microsoft co-founder Bill Gates once said: "AI has the ability to change the world. AI is the most important thing in this decade." The ChatGPT craze further confirms Bill Gates' point of view, declaring that the AI big model competition has entered a white-hot stage. Data show that there are at least 130 companies in China to study large model products, of which 78 are general large models, artificial intelligence applications in the field of large models to open up a new situation.

Driven by the technology paradigm of "pre-trained big models + human feedback intensive learning" brought about by ChatGPT, major domestic manufacturers have started commercial competitions in the ecology of big models and related applications.

whether it is hkust xunfei, which has the slogan of "1024 benchmarking ChatGPT", or Shang Tang, which has made a horizontal comparison between its new model InternLM-123B and Meta llama2, its focus is on the large model of 100 billion parameters. Yuncong Technology, one of the "AI Four Little Dragons", has also released its self-developed Congcong model.

Since its establishment, Yuncong Technology has called itself an AI platform company, providing customers with human-machine collaborative application products and overall operating systems. The concept of cloud from human-machine collaborative operating system (Cloudwalk Operating System) proposed by cloud from technology shows the ambition of cloud from technology to build the underlying software system, and also makes the active combination and interaction with the real industry become the business background of cloud from technology.

in the era of big model business transformation, what is the background of cloud technology business? can the big model realize multi-scenario landing application and better contribute to economic development and enterprise benefits? what information does the recently released financial report reveal?

Can the revenue growth dilemma be broken?

in the wave of AI in 2023, the "first share of AI platform" cloud from technology (688327.SH), which is highly expected by capital, has entered the "100-model war.

in March 2023, yuncong science and technology issued a fixed increase announcement and raised funds again when the IPO was less than one year old. the proposed project is a big model on the cusp of the storm. In may 2023, yuncong science and technology demonstrated its independently developed "cong Rong da model" at the "AI enabled digital China industry forum and 2023 yuncong science and technology man-machine collaboration conference". In August 2023, Yuncong science and technology released the 1.5 version from the model, this version contains a variety of model specifications of 1 billion, 10 billion and 100 billion levels. The measured performance ranks first in the 10 billion level and fourth in the overall list in the global comprehensive examination and evaluation of large models (C-Eval). In order to solve the problem of landing large models, industry large models with parameters of 13 billion (13B) are distilled from 100 billion large models.

cloud aims at the development trend of artificial intelligence technology from science and technology, and has successively laid out four major business areas, namely, intelligent finance, intelligent governance, intelligent travel and intelligent commerce. it has emerged from the previous rounds of market competition and is called "AI four little dragons" together with Shang Tang technology, Kuang Shi technology and Yitu technology, boosting the transformation and upgrading from digitalization to intelligence. However, like other technology companies, Yuncong's products have been questioned for a long time, and the ups and downs of revenue growth have also attracted widespread attention from investors from all walks of life.

is the operating income of cloud technology a flash in the pan? we should also look at it from its operating income and the dismantling of the project landing situation.

cloud realized operating income of 0.2131 billion yuan, 0.3911 billion yuan, 0.4559 billion yuan, 0.5264 billion yuan, 45.34 million yuan, 0.1636 billion yuan and 0.3459 billion yuan respectively from the first quarter of 2022 to the third quarter of 2023, with year-on-year change rates of 67.02, -13.97, -41.53, -51.06, -78.72, -58.16 and -24.13 respectively. Overall, the cloud from the technology operating income situation is really not bright, since the listing has continued to be in a year-on-year decline, compared to the fourth quarter of 2018, the fourth quarter of 2019, 66.77 percent, the second quarter of 2021 105.74 percent year-on-year growth in operating income, everyone's disappointment seems very reasonable.

In the prospectus, Yuncong Technology said it plans to turn a profit by 2025. According to the agency's forecast results, the total revenue of Yuncong Technology from 2022 to 2025 will reach 1.682 billion yuan, 2.501 billion yuan, 3.227 billion yuan, and 4.011 billion yuan respectively, with a compound growth rate of 33.60. By the third quarter of 2023, the company's operating income is still 2.156 billion yuan away from the "small target" of 2.501 billion yuan, and it is very difficult to complete the annual forecast revenue of 86.17 in the remaining quarter.

Even so, Pacific Securities still gave Yuncong Technology a "buy" rating, and said in a research report: "The company is a domestic AI technology leader with a deep accumulation of core technology, and is forward-looking in the current AI wave layout of large models, and attaches importance to commercial landing applications. The company continues to invest in research and development plus code large models, which is expected to bring new impetus to business growth." This shows that the technical strength of cloud from technology is still favored by some institutions and investors.

industry researcher Wei fangchao said: "the competition in the domestic artificial intelligence market is extremely fierce. it is common in the industry that AI industry's revenue growth is difficult and its profit space is squeezed. for the" first batch of crab-eating "enterprises such as yuncong technology and shangtang technology, more attention should be paid to the company's future development prospects at this stage. when the new technology has passed the accumulation stage, the" window paper "financial data that has broken the project application will have a relatively big turning point"

it is understood that yuncong science and technology has developed autonomous and controllable human-machine collaborative core technologies such as vision, voice, natural language understanding and big data. it has won the crown in the field of artificial intelligence at home and abroad for 10 times. it has realized the closed loop of core technologies from intelligent perception to cognition and decision-making, and activated the technology and application upper limit of human-machine collaborative operating system (CWOS) from the large capacity model through multimodal series, at the same time, it is constantly expanding new ecological and landing opportunities.

since 2023, cloud has been cooperating continuously in science and technology business, and has successfully adapted from rongda model to push and train all-in-one machine with Huawei ascension. Jointly with Jiadu Technology and Chongqing Urban Transportation Development Investment Group to Release Zhixing Urban Transportation Industry Model; Jointly developed the world's first large port model with Tianjin Port Group; Signed contracts with many companies such as China Inspection, Shenzhou Information, Jiadu, Shenzhen Newspaper, Youzu, A large model industry ecological alliance has been established to jointly promote the construction of large industry models.

with the smooth progress of the project, the benefits of the project are simultaneously shown in the financial report for the third quarter of 2023. data show that in the third quarter of 2023, yuncong science and technology realized a revenue of 0.182 billion yuan in a single quarter, up 181.27 year on year, and the performance growth rate was significantly improved. as of September 30, 2023, the company's order amount in hand exceeded 0.6 billion yuan, up more than 80% over the same period last year, realizing the business income of 0.212 billion yuan of man-machine collaborative operation system, the year-on-year growth of 126.40 per cent has exceeded the full-year 2022 level.

Do big model marginal effects work?

In addition to the revenue situation, the project landing has also had a positive impact on the profit level.

Yuncong Technology's gross profit in the third quarter of 2023 was as high as 0.2142 billion yuan, an increase of 0.12 billion yuan in a single quarter, a month-on-month growth rate of 126.62; a year-on-year increase of 0.054 billion yuan, a year-on-year growth rate of 33.88. From the perspective of gross profit margin, the gross profit margin from the first quarter of 2022 to the third quarter of 2023 was 40.37, 35.88, 35.10, 34.06, 74.42, 57.76 and 61.93 respectively. The comprehensive gross profit margin level in the third quarter further increased to 65.67, up 35.28 percentage points year-on-year and 14.30 percentage points month-on-month.

Zhou Xi, chairman of Yuncong Technology, once said: "The platformization and standardization of technology allows AI companies to quickly adapt to massive scenarios and realize massive applications through human-machine collaborative operating systems, and the marginal effects of large models will gradually emerge, and the marginal cost of technology will continue to approach zero." The recent changes in the cloud from the technology gross margin level also seem to confirm this view.

cloud has also improved its overall profitability in terms of science and technology. from the first quarter of 2022 to the third quarter of 2023, it has realized net profits of -0.1158 billion yuan, -0.3254 billion yuan, -0.5894 billion yuan, -0.8689 billion yuan, -0.1422 billion yuan, -0.3041 billion yuan and -0.4012 billion yuan respectively. it is still in a loss state, but judging from the changes, the year-on-year rate of change in net profit attributable to the parent company was 45.52, 11.06, -42.63, -37.46, -22.76, 6.53 and 31.93, respectively, and losses continued to narrow in the second and third quarters, and are trying to get rid of the curse of "the greater the revenue, the more losses.

At the same time, Tianyan data shows that the company's cash flow situation is also continuing to improve. In the first three quarters of 2023, the company's net cash flow from operating activities was -0.273 billion yuan, an increase of 48.49 from the same period last year. The outflow decreased significantly. Wei Fangchao, an industry researcher, said: "Although the cloud has not completely reversed the decline in the current profit and cash flow of science and technology, it has shown a good trend, which will help the company to occupy a favorable position in the domestic competition in the future, thanks to the optimization of product structure, the decline in the cost outflow of purchased products and services, and the remarkable effect of cost control."

The current financial performance and business trends have also made the public and investors have new expectations for the future of this "AI veteran player.

How does the cloud stand out from technology?

From the perspective of the artificial intelligence industry, in recent years, generative artificial intelligence technology has developed rapidly as a representative of the application of computing power, and a variety of large model products are competing to appear. Massive application scenarios have become a high-quality "test field" for the development of artificial intelligence in my country. A large number of new technologies, new applications, and new breakthroughs accelerate the growth and release the potential of computing power applications.

October 9, 2023The Ministry and other six departments jointly issued the Action Plan for High-quality Development of Computer Infrastructure, setting out the main development goals by 2025, and proposing six key tasks, including improving the comprehensive supply system of computer power, improving the efficient carrying capacity of computer power, strengthening the efficient and flexible guarantee of storage power, deepening the application of computer power enabling industries, promoting the development of green and low-carbon computer power, and strengthening the construction of safety guarantee capacity, it is proposed to create a number of new businesses, new models and new formats of computing power, deepen the application of computing power enabling industries, and once again push the cloud from the main business of science and technology to the wind.

Yuncong Technology has been deeply cultivated in the field of general artificial intelligence for many years. The man-machine collaborative operating system launched by the company provides artificial intelligence solutions for many enterprises at home and abroad. The system has been widely used and recognized in finance, travel, energy and other industries, and has achieved remarkable results. It is reported that the big model will be applied to vertical fields such as finance, government affairs, travel, energy, education, medical treatment, entertainment and so on in the future. Through the new artificial intelligence enabling service, "Make AI Great Again" (make AI great again) will become a reality.

On October 19, 2023, at the 2023 Smart Port Conference with the theme of "Digital Leading Smart Empowerment", Huawei, Tianjin Port Group, Zhejiang Seaport Group, Tianjin Supercomputing Center and Yuncong Technology jointly launched the joint research and development of the port large model PortGPT. At present, the port big model PortGPT has initially planned port production, logistics services, customer management, customer service, video analysis, office assistance and other application scenarios to carry out testing, and through the promotion of the application of the PortGPT language big model.

on November 3, 2023, yuncong technology said on the investor interaction platform that in recent years, the company has actively explored the application scenarios related to digital people and intelligent robots based on the man-machine cooperative operating system. at present, the company has developed a mobile selling robot for cloud 100, and has led the construction of Chongqing artificial intelligence large model technology innovation center and participated in the construction of Chongqing AI robot technology innovation center in Chongqing. Large model technology has entered an important stage of development before large-scale industrialization, with many potential sub-application scenarios and demand growth outbreak points, the industry is facing good market opportunities.

But the future of Yuncong Technology is not a Ma Pingchuan. While the business prospects are promising, it is accompanied by a large number of strong competitors. In just half a year, domestic large models have accelerated the development of iFLYTEK's "Spark", Tencent's "Mixed Yuan", and Baidu's "Wenxin Yanyan" have stepped out of the laboratory to face the public.

In short, the tide of AIGC has come. As an accelerator in the next era of science and technology, the big model will play a role in future technological development, domestic innovation in the field of new technology, and social and economic prosperity, and has become one of the important factors for a country to improve its international competitiveness. one.

although there are still hidden worries about cloud technology, it is still trying to adjust the pace of development. whether it can lead AI development for a long time in the future, time will give us the answer.

Author Yu Yan