New stock preview|Tencent, Kuaishou, Sequoia betting, the first market share, how is the investment value of Minglue Technology-W?

Tencent-backed unicorn Minglue Technology-W (formerly known as "Hui Zhi Holdings") has embarked on a new journey for its second attempt at a Hong Kong IPO. On June 10th, the holding company of Shanghai Minglue Artificial Intelligence (Group) Co., Ltd., Minglue Technology (hereinafter referred to as "Minglue Technology"), submitted its listing prospectus to the Hong Kong Stock Exchange, planning to list on the main board in Hong Kong. This is its second application after the failed submission on November 29, 2024. This Shanghai-based AI unicorn was founded in 2006 and is a leading data intelligence application software company in China. The company's main data intelligence products and solutions cover marketing and operational intelligence, involving both online and offline scenarios. It is dedicated to changing enterprise marketing, operational strategic design, and decision-making processes through large models, industry-specific knowledge, and multimodal data. According to Frost & Sullivan, based on total revenue in 2023, Minglue Technology is the largest data intelligence application software provider in China. This is also a Tencent ecosystem unicorn, with Tencent being the company's largest shareholder and having close business ties with Minglue Technology. According to the prospectus, after several rounds of financing, Minglue Technology has gathered star shareholders, with Tencent, Sequoia China, Kuaishou, among others, among its shareholders. Among them, Tencent holds approximately 26.96% of Minglue Technology's shares through Imagining Architecture Investment (Hong Kong) Limited, Grace Gate Holding Limited, and Master Power Holding Limited, making it the largest shareholder of the company. At the same time, one of Minglue Technology's key products, Weiban Assistant, is based on the Tencent ecosystem, with its founder being Xiao Hong, the founder of Manus. So, from the perspective of the secondary market, what is the investment value of Minglue Technology? Revenue scale exceeding 1 billion, facing the "profitability challenge" with high R&D expenses Looking at the breakdown of the revenue structure, Minglue Technology's products and solutions can be mainly divided into three categories: marketing intelligence, operational intelligence, and industry AI solutions. Specifically, marketing intelligence products mainly include Miaozhen system, JinData, and private domain tools based on the Tencent ecosystem (Weiban Assistant). Among them, the Miaozhen system, which consists of three segmented products: media spending optimization software, social media management software, and user growth software, was one of the earliest products launched by Minglue Technology and is the main component of its revenue. Weiban Assistant is based on the Tencent ecosystem and can help companies interact with private and public domain customers through WeChat and WeChat business. Operational intelligence products mainly include intelligent store operation systems, which digitize and automate the service processes of "people, goods, and space" in stores, and the operational large model developed independently using the company's unique industry knowledge graph and industry data. In addition, industry AI solutions mainly provide customized solutions that allow customers to manage data centrally and discover hidden patterns in data, enabling them to make wiser decisions. With the support of the rich and complete product lineup mentioned above, Minglue Technology has also built a relatively solid and large customer base. As of December 31, 2024, the company's operational intelligence products and solutions have been deployed in over 20,000 restaurants and more than 46,000 offline retail stores. During the period, the company has provided services to 135 Fortune Global 500 companies, with clients in industries such as retail, consumer goods, food and beverage, automotive, 3C, cosmetics, and maternal and child products. With a relatively large customer base, Minglue Technology's revenue has already exceeded 1 billion. According to the data in the prospectus, from 2022 to 2024, Minglue Technology achieved revenues of 1.269 billion yuan, 1.462 billion yuan, and 1.381 billion yuan respectively, with a slight year-on-year decrease of 5.54%. This was mainly due to a decrease in revenue generated by the operational intelligence business, but the overall revenue scale has remained above the 1 billion mark. In terms of net profit, the company achieved net profits of 1.638 billion yuan, 318 million yuan, and 7.9 million yuan respectively from 2022 to 2924, showing a year-on-year decline. Minglue Technology explained that the decline in net profit was mainly due to changes in the fair value of preferred shares, subscription warrants, and convertible notes. It is worth noting that, from 2022 to 2024, Minglue Technology's adjusted net losses were 1.099 billion yuan, 174 million yuan, and 45.113 million yuan, respectively, indicating that the company has not achieved true "profitability". This may also be related to the company's high R&D investment. During the same period, the company's R&D expenses were 751 million yuan, 481 million yuan, and 353 million yuan, accounting for 59.2%, 32.9%, and 25.6% of the corresponding year's revenue. Although the R&D expense ratio had already been reduced to 25.6% in 2024, continuous investment in the AI field is needed to maintain technological leadership. Fortunately, Minglue Technology has a relatively high gross profit margin, which was 53.2%, 50.1%, and 51.6% in 2022, 2023, and 2024 respectively. This means that in the future, as the company's products benefit from industry trends and experience significant growth, the company is poised to quickly enter a period of growth and profitability. The future of the industry is promising, with obvious technological advantages With multiple drivers such as policies and technology, the Chinese data intelligence application software market has great potential. According to Frost & Sullivan, the industry market size was 30.3 billion yuan in 2023, with a compound annual growth rate of 20.4% in the past five years. The market size compound annual growth rates for marketing intelligence and operational intelligence were 20.4% and 23.9% respectively, accounting for 28% and 14.9% respectively. It is projected that by 2028, the industry market size will reach 71.3 billion yuan, with a compound annual growth rate of 18.7%. With double-digit growth, it undoubtedly reveals the growth potential of the industry. Artificial intelligence and policies are also accelerating the expansion of industry demand. Under the direction of the new principal productivity, the Chinese government has issued a series of policies and measures, such as the "14th Five-Year Plan for Digital Economic Development," the "Guiding Opinions on Strengthening Data Asset Management," and the "Data Element X Three-Year Action Plan (2024-2026)," to promote digital transformation across various industries and expand the Chinese data intelligence application software market. However, GMTEight has observed that at present, generalized large models still face various challenges. One major challenge is the tendency to create "illusions," where the outputs or information generated by the models may seem reasonable but are not correct or realistic. In addition, these models show decision defects in complex scenarios and lack coordination and controllability in practical applications. In view of these limitations, it is becoming increasingly important to tailor more targeted large models to specific vertical fields. Whether generalized large models can be transformed into large models suitable for vertical fields depends on whether they can obtain a large amount of "high-value" multimodal data with specific industry attributes, which also forms a certain "examination effect" on the technological capabilities of related companies. Looking at the competitive landscape, industry participants are relatively dispersed, with the market share of the top five companies being below 10%. Among them, Minglue Technology is the industry leader and one of the first companies in China to adopt AIoT, AIOps, and serve multimodal large language models. Based on revenue in 2023, the company's market share was 4.4%, which is 2.3 percentage points higher than the second place. The company holds a market share of 8.9% in the marketing intelligence market and 13.1% in the operational intelligence market, both significantly higher than the second place. This means that Minglue Technology has a strong technological advantage. According to the prospectus, as of December 31, 2024, the company owns 2,177 patents and has 926 patent applications, as well as over 450 domestic and international awards. Specifically, as of December 31, 2024, the company owns 1,167 invention patents covering areas such as data intelligence, enterprise knowledge graphs, and data privacy, indicating a deep technological "moat." In summary, the real bottleneck for Minglue Technology lies in the "inefficient monetization of technology assets," which is a typical pain point during the transformation period for technology companies. However, the company's role as an "infrastructure" in the field of data intelligence is irreplaceable. If generative AI accelerates its penetration in marketing and operational scenarios, the company may replicate Adobe's path to significantly increase gross profit margins through AI tools, transforming from a "loss-making unicorn" to an "AI era operating system," and its commercial value may become more substantial.