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What You Need to Know About Qingdao AInnovation Technology Group Co., Ltd (02121.HK) IPO?

Qingdao AInnovation Technology Group Co., Ltd (02121.HK) has finished its IPO and listed in Hong Kong Stock Exchange on Jan 27, 2022. The IPO price was HKD 26.3. However, the stock was slumped below its IPO price with lowest at HKD 16.2. What is Qingdao AInnovation Technology Group Co., Ltd ? Here are the summary your should know about this company.

What is Qingdao AInnovation Technology Group Co., Ltd (02121.HK)?

Qingdao AInnovation Technology Group Co., Ltd (02121.HK) is a fast-growing enterprise AI solutions provider in China. The company have developed proprietary computer vision and machine learning AI
technologies to empower businesses in China. According to Frost & Sullivan, in 2020, the company was the third largest AI technology driven solution provider in enterprise AI solutions market in China in terms of revenue with 0.3% market share among more than 1,500 market players.

The company mainly focus on developing and delivering AI-based products and solutions for the
manufacturing and financial services industries in China. During the Track Record Period,
the company had a total of 50, 150, 157 and 130 customers respectively in 2018, 2019, 2020 and the nine months ended September 30, 2021, respectively. Revenue generated from the five largest customers in the Track Record Period accounted for approximately 38.8%, 29.3%, 42.1% and 44.3%, respectively.

Financial Highlights

Revenue increased from RMB37.2 million in 2018 to RMB229.1 million in 2019 and further increased to RMB462.3 million in 2020, representing a CAGR of 252.5% from 2018 to 2020. Revenue also increased from RMB297.6 million in the nine months ended September 30, 2020 to RMB553.0 million in the nine
months ended September 30, 2021.

Gross profit increased from RMB23.4 million in 2018 to RMB71.6 million in 2019 and further increased to RMB134.6 million in 2020, representing a CAGR of 139.8% from 2018 to 2020. Gross profit also increased from RMB85.3 million in the nine months ended September 30, 2020 to RMB170.9 million in the nine months ended September 30, 2021.

In 2018, 2019, 2020 and the nine months ended September 30, 2021, there were net losses of RMB71.2
million, RMB248.4 million, RMB360.6 million and RMB438.0 million respectively. Eliminating
impact of items including share-based payment expenses, finance cost of financial liabilities of
redeemable shares and listing expenses, adjusted net loss were RMB45.4 million, RMB160.0 million, RMB144.5 million and RMB81.0 million in 2018, 2019, 2020 and the nine months ended September 30, 2021, respectively.

Conclusion

Qingdao AInnovation Technology Group Co., Ltd have shown a strong growth in revenue during past few year. However, as the company only account for 0.3% market share in the industry and the revenue is highly concentrated on its top five customers. The stock may not be a top choice for investor.

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