Sensetime has an annual revenue of 4.7 billion yuan and a further widening loss. Can it sustain a market value of 200 billion yuan?
Sensetime, as the first of the four AI dragons, is listed ahead of Megvii, Yuncong and other AI unicorns.Although the listing process was bumpy and even delayed for a time, it was finally successfully listed on the Hong Kong Stock Exchange on December 30, 2021.It was favored by investors at the beginning of its listing, and its market value once exceeded HK $320 billion.Despite the recent correction, the market cap remains at HK $21.1 billion, up 63.63% from its HK $3.85 offer price.So, the capital market is strong, the attention is countless, the AI unicorn has more than 3,000 scientists to build how?In 2021, Sensetime’s revenue was 4.7 billion yuan, up 36% year-on-year, with an annual loss of 17.177 billion yuan. In the past four years, the accumulated loss exceeded 37.7 billion yuan.Among them, the deficit was 3.432 billion yuan in 2018, 4.967 billion yuan in 2019, and 12.158 billion yuan in 2020.Of course, the bulk of the losses came from fair-value losses on preferred shares.The adjusted EBITDA loss in 2021 was 1.418 billion yuan, and the total adjusted loss in the past four years exceeded 3.4 billion yuan.Persistent loss is one of the biggest problems, the loss not only presents a rising trend year by year, and the amount of loss is also surprising.Not only Sensetang, but other AI unicorns are also in a long-term loss state.From 2018 to 2020, the losses of Gering Deep Pupil are 74.55 million yuan, 418 million yuan and 78.2 million yuan respectively, and the accumulated losses for three and a half years are 570 million yuan. In 2021, the losses are expected to be 65 million to 80 million yuan.In 2018, 2019 and 2020, yuncong suffered losses of 181 million yuan, 1.708 billion yuan and 690 million yuan respectively. In the first half of 2021, yuncong suffered losses of 323 million yuan and accumulated losses of 2.9 billion yuan in three and a half years.Yitu technology lost more than 7.2 billion yuan during this period, and Megvii technology, Lifei Yuntian and other companies are also in the red.AI has a broad prospect, but on the way to “Poetry and afar”, AI business application scenarios will be the core of AI unicorns.At the end of the day, players on the AI track are competing for landing skills, which is also an important measure of AI strength.In business, AI unicorns are showing strong growth momentum.This is mainly due to the strong demand for AI technology, so far AI unicorns have shown strong growth in revenue.In the whole artificial intelligence market, edge artificial intelligence and computer vision are the most promising markets.According to an earlier Gartner survey, corporate respondents investing in AI said they plan to invest the most in computer vision, with an average of $679,000 over two years.According to IDC and Sullivan’s market report, Sensetime has ranked first in China’s computer vision application market share for three consecutive years.Compared with other machine vision manufacturers, through the report can see sensetang AI landing ability is strong.Combined with revenue, revenue has grown strongly over the past few years.In 2018, the revenue was 1.853 billion yuan and grew to 3.446 billion yuan in 2020, with a compound annual growth rate of 36.4%. In 2021, the revenue grew 36.4% year on year.”2021 is the most important year for Sensetime since its establishment,” said Li Xu, CEO of Sensetime. “Our business has recorded accelerated growth and our research and development has achieved a series of major breakthroughs, laying a solid foundation for future development.”In the scenario of Sensetime AI implementation, the strong business model of smart business and smart city realization, SenseCore has high scalability. Its general ARTIFICIAL intelligence infrastructure, SenseCore, integrates the research and development and production capacity into a unified bottom layer, providing smooth, standardized and end-to-end artificial intelligence model production process.SenseCore enables the mass production of ai models that are scalable and applicable to a wide range of scenarios.By the end of 2021, SenseCore had produced more than 34,000 commercial models, up 152% from 13,000 in 2020.With the support of SenseCore, Sensetime is accelerating the implementation of AI technology in four sectors: smart business, smart city, smart life and smart car.Among the four business sectors, smart city has a bright performance.By the end of 2021, SenseFoundry’s Urban Ark had been deployed in 140 cities, up 48% from the end of 2020.In addition, the number of AI models carried by urban rafting increased to 22,400, up 156 percent from the end of 2020.With the improvement of urban Ark’s coverage and penetration rate in various cities, the performance growth space has been opened.In 2021, the smart city segment achieved revenue of 2.14 billion yuan, with a year-on-year growth of 56.5%. It is not only the largest business segment of Sensetime, accounting for nearly 50% of the total revenue, but also the segment with the strongest growth of all sectors.Secondly, as the second largest business segment of Sensetime, smart business also has a strong performance, including state Grid, Beijing-Shanghai High-speed Railway, SoftBank, Aliyun and other leading customers in the industry, with a total number of 922 customers.As many industry leaders use senseFound-Enterprise ark platform to one-stop acquire more than 13,000 kinds of AI models to build various industrial applications, realizing digital intelligent upgrade of Enterprise production activities, space operation and process management, driving business segment to become the largest segment of Sensetime.Accounting for 41.7% of the total revenue, the commercial sector achieved revenue of 1.96 billion yuan in 2021, up 31.8% year on year.Overall, thanks to the self-built SenseCore, as a work force, general intelligence algorithm and development platform, a new intelligent infrastructure, the production of tens of thousands of AI model in cars, mobile phones, urban space and commercial space, have been assigned to more than 1 billion sets of the iot devices, AI reasoning operations in carrying out trillions of times a day,Realizing the vision of connecting the physical world and the digital world.Of course, there are a lot of heavyweight players in the ARTIFICIAL intelligence market. Sensetime not only faces computer vision unicorns like Megsight, Yuncong and Lifei, but also heavyweight technology giants like Huawei and BAT, as well as traditional giants like HiKvision and Dahua.Previously, Sensetime noted that competitors may have a longer history of business operations, or have/will have access to more financial resources, more advanced technical capabilities, and a broader customer base and relationships than we do.In addition, as Sensetime expands into areas such as cloud services, competitors will compete on a different basis and face more competitors.In the face of market competition, Sensetime raised HK $5.552 billion to enhance its research and development capabilities, including expanding the computing power of AIDC, strengthening ai chip design and developing its own AI chip solutions and enhancing ai model-related capabilities.As SenseCore invests heavily in r&d to support product and service innovation, SenseCore will benefit from increased AI model productivity as it continues to improve its technology and production capabilities.Finally, artificial intelligence enables thousands of industries to transform and boost the speed of industrial intelligence.Due to many factors, such as the perfect service and scene landing ability of the technology giants, artificial intelligence is used to help the transformation and upgrading of all sectors, but also to reap the development dividend of the industry.For AI unicorns, whether they can maintain sustained growth in the face of increasingly fierce competition is also a big challenge.At present, smart business and smart city are the core parts of Sensetime AI landing scenes, accounting for 87% of the total revenue. We can see the strength of SENsetime AI on these two tracks.As investment in AI is expected to increase, players on the AI track are expected to continue to reap the market dividends.Jianyong Yang is a Contributor to Forbes China, specializing in cutting-edge technologies such as the Internet, cloud services and artificial intelligence.