【HK IPO】Qiniu Intelligence: The third largest audio and video Paas service provider in China
I. Basic Information
1.1 Company Profile
$QINIU(02567.HK), founded in 2011, is a global leading one-stop scenario-based intelligent audio-video APaaS solution provider. The company is headquartered in Shanghai, with branches across China and subsidiaries overseas.
The company specializes in audio-video technology and AI R&D, leveraging technologies like video-on-demand, interactive live streaming, and real-time communication to develop core AI capabilities in intelligent vision, intelligent voice, intelligent editing, and content security. It provides APaaS application services for enterprise users in key scenarios such as social entertainment, video marketing, video IoT, smart new media, and the metaverse.
1.2 IPO Information
II. Fundamental Analysis
2.1 Financial Data
Revenue: The company reported revenues of RMB 1.471 billion, RMB 1.147 billion, and RMB 1.334 billion in 2021, 2022, and 2023, respectively. Revenue lacks stability and shows a declining trend.
Profit: Gross profits were RMB 291 million, RMB 229 million, and RMB 280 million in 2021, 2022, and 2023, with gross margins of 19.8%, 19.9%, and 21.0%, respectively. Net losses were RMB -220 million, RMB -213 million, and RMB 324 million, accumulating over RMB 750 million in losses over three years.
2.2 Market Position
(1) In 2023, the top five service providers in China's audio-video PaaS market accounted for 39.2% of the market share. Qiniu Intelligence ranked third with revenue of RMB 1.33 billion, holding a 5.8% market share.
(2) In 2023, the top five service providers in China's audio-video APaaS market accounted for 48.1% of the market share. Qiniu Intelligence ranked second with APaaS revenue of RMB 280 million, holding a 14.1% market share.
III. Cornerstone & Sponsor Analysis
The company introduced one cornerstone investor for this IPO, with a total subscription of HKD 46.5 million. At the mid-point of the offering price, the subscription accounts for 40% of the total shares issued, which is a decent proportion—close to half. The cornerstone investor has a six-month lock-up period...
IV. Lottery Rate Analysis
The Hong Kong public offering consists of 15.97 million shares, with 1,000 shares per lot (15,970 lots in total). The current margin financing multiple is around 8x. Despite the recent strong performance of Hong Kong stocks (rising dizzyingly), it is unlikely to exceed 15x, meaning no clawback. Thus, Groups A and B will each receive 7,985 lots. Assuming 5,000 applicants, the estimated lottery rate for one lot is 60-80%...
V. Comprehensive Analysis & Rating
1. Fundamentals: The company's fundamentals are unimpressive—declining revenue, modest gross margins, and cumulative losses exceeding RMB 750 million over three years. Profitability seems distant.
2. Brand Recognition: The company performs well in niche segments and is somewhat well-known in the industry, but there's still room for growth.
3. Cornerstone Investors: One cornerstone investor subscribed for HKD 63.9 million, accounting for 40% of the offering—a decent proportion.
4. Market Conditions: The industry outlook is unremarkable, but Hong Kong stocks have been exceptionally strong lately, repeatedly crushing short sellers. $Hang Seng Index(00HSI.HK) has surged past 22,700... Who would've thought the Hang Seng Index would hit 20,000 so quickly?
5. Valuation: The current valuation is HKD 5.4-5.7 billion. Qiniu Intelligence has raised over RMB 3 billion in funding, with backers like Alibaba, Matrix Partners China, Qiming Venture Partners, and Zhangjiang Hi-Tech. However, none of these investors participated as cornerstones this time...
6. Liquidity: The company is issuing 160 million shares, aiming to raise HKD 448 million. With cornerstones locking up 40%, the remaining HKD 270 million will be freely tradable. Selling pressure won't be light, but given the recent strength of Hong Kong stocks (daily turnover reaching HKD 400 billion), this liquidity is negligible.
7. Conclusion: Qiniu Intelligence's fundamentals are mediocre. IPO subscriptions are highly emotional investments. With the current bullish market, it's better to just dip a toe in—IPO gains might not even beat buying the Hang Seng Index...
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