Good morning, investors. I'm Ma Xiao, a flight attendant at Debian. Today, we are honored to invite Mr. Fan from XuanWuYun to share and communicate with you. This time, we will have two sessions. The first one is about the company's situation. The second session is about the interaction. Let's give the time to XuanWuYun.
Okay, thank you, Mr. Ma. Good morning, investors. I'm Fang Wenwen, the IRD of Xuanwu Cloud. I'd like to thank Lu Yanzhong for introducing the business of Xuanwu Cloud Group to our investors. Many investors are new to Xuanwu Cloud, so I'd like to give a brief introduction.
First of all, XuanWuYun has officially launched into the Hong Kong stock market in 2022. We are the largest smart CRM service provider in the country. Our sales volume in 2023 has already reached nearly RMB 1.3 billion. Recently, everyone is very concerned about the business development of the AI track. XuanWuYun was founded earlier in the industry.
We are a smart CRM company with full support of AI capabilities. We established an AI lab in 2016. In terms of AI, we have nearly 100 patents. We are also the first company in the CRM industry to launch AIGC applications. Our current business is to cover four industries, including finance, fast trading, securities and TNT. AI technology is mainly applied to consumer companies.
As you can see on our TBT, we have recently launched a big model strategic cooperation with Huawei cloud. We also launched the first dual-mode big model in China in the vertical large-consumer field. This is an overview of our company. In terms of business performance, we now have more than 2,970 customers. The core customer income ratio can contribute a ratio of nearly 95%.
Because we are mainly a big customer service, the annual contribution of our core customers can reach 3.7 million RMB. Our core customer flow rate can also reach 85%.
Considering that in the past two or three years, many companies have been increasing their prices, and they have maintained a more stable investment style in terms of marketing costs. So in the past year, we have been working hard to improve our operating cash flow. On the other hand, our cost rate has dropped by 4.4% in comparison, especially in terms of marketing costs and admin control.
This slide shows the overall diversification of XunWuYun. We now have two main business platforms. One is PaaS and the other is SaaS. Basically, the income ratio is 5-5K. In April, we first announced our QE operating data. Our SaaS's income ratio also broke 50% for the first time.
In the future, we will continue to improve the profitability of SAAS.
In 2011, Xiongwu started from the communication business, so we launched a CPaaS platform, including WeChat, SMS, and Push to connect to the whole media. Customers can call these communication capabilities through API or SDK.
In 2015, we launched the APAC platform. In 2016, we launched the AI lab. In 2019, we launched the data intelligence platform. So we have been gradually setting up data intelligence and artificial intelligence. Based on this platform, we have also gradually developed our SaaS products, including marketing cloud, sales cloud and customer service cloud.
As we just mentioned, our major customers are clients in the service industry. Marketing is more for financial clients, such as banks, securities and insurance. We help these clients to integrate these different communication channels with their users to create a integrated communication platform and a solution.
The sales cloud is mainly for customers in the large consumer industry, such as beverages and milk products. Why do we want to enter the large consumer sector?
As you all know, China's offline marketing chain is very long-lasting. For these brands, they need a lot of energy and physical management to manage their offline markets.
So, as you can see, we have a lot of sub-modules under the Sales Cloud, including management of salespeople, management of costs, such as TPN, distributors, and retail, stores, and mid-range management. All of these require corresponding software to help the brand side to increase the cost. The other part is the Customer Service Cloud. This part is a company we acquired in 2018 called Dejiu Technology. It mainly serves some
and help them to do some calls or smart consulting. As you can see, Xiongwu has already served so many big companies. In fact, we have already reached a certain market share rate in these hundred companies, which is 20% to 30%.
Last year, we did a lot of deep matching in the domestic market, so our current market share is already over 50% in Baixiang. We are actually trying to gradually expand our market share in the future on the different sub-sectors of consumption, such as Japaneseization and pet. We are also trying to increase our market share in this area of consumption to more than 50%.
This is our entire customer wall. So you can see that in terms of expansion, last year, we were able to reach a total of $1.2 billion including the expansion of the beer and the overall contract amount.
In fact, due to the rapid expansion of the market, many of our customers face more and more complicated customer scenarios, especially for large models such as XHPT.
They also rely on more intelligent technology to help them solve business problems. Financial, securities, Internet of Things, Huawei, and Nanfang Dianwang are all our big customers. We also hope to help them to realize such a smart transformation.
Next, I would like to share with you more details about the important business in our SaaS platform. As I mentioned just now, marketing cloud is a very important bottom-line business under our SaaS product. In 2023, the income contribution of the entire SaaS platform reached more than 80%. What kind of problems does marketing cloud mainly help customers solve?
In fact, many banks and insurances, including insurance companies, need to connect with users through multiple channels. Many users now use channels like Douyin, Xiaohongshu and WeChat to interact with companies.
From the perspective of banks, the information they need to process is extremely fragmented. So what Yingxiaoyun can do to help customers solve this problem is to help these information to be integrated, to be managed in a one-stop business, and to meet the needs of these companies in different business scenarios. In fact, many of the major customers of Yingxiaoyun are in the financial industry, and they have high requirements for information security.
So we not only have public cloud deployment, but also private cloud deployment to help them ensure the security of information distribution.
In addition, we are cooperating with many suppliers and helping these banks to expand the new traffic on the basis of the number of users. We can choose from their designated areas.
to select some of their target customers, and then through all these messages, including these 5G messages, to achieve some precise answers to these new traffic. This is a brand that can help customers to improve the conversion rate of this marketing. ICC is actually a very core product of our marketing cloud.
In the past two or three years, the government has been advocating for a nationalization of software. As you can see, we have achieved a nationalization on the chain of database, encryption algorithm, operating system, CPU, etc.
In the past year, ICC's revenue has grown by nearly 30%. Our core customer, Apple, has also reached more than 3 million RMB. This is also a feature of our customer service. Next, I would like to focus on the second growth curve of our company's future strategic development, which is the sales cloud.
The main focus of Sales Cloud is AI and fast sales. The background we just talked about is that the large-scale consumer business itself is complex enough and very diversified. So, in fact, we have deployed a lot of standard products to help brands to really reduce costs and increase efficiency and to help them to generate revenue.
Our AI technology is mainly focused on image and video recognition. Since we established the AI lab in 2016, we have been improving our AI technology every year.
We have more than 10 million SKUs. We can process more than 7 million photos per day. At the same time, our recognition rate can reach more than 95%. This is not inferior to Baidu and Tencent.
Let me give you a simple example. Our company mainly provides land-based business, so many investors, including analysts, may not know how to specifically help these brands to reduce costs and increase efficiency. Let me give you an example. In fact, many of these fast-selling companies need to invest a large amount of offline settlement fees every year. But offline, SKU in these supermarkets,
how to place it at the end of the store will greatly affect the sales at the end of the store. So for each store, whether these salespeople have placed it according to the brand's requirements, or whether the retailers have followed the requirements, in fact, many of these brands will send salespeople to verify. We have an example of toothpaste here.
Because the type of toothpaste is very complex, including the identification of the price, it requires advanced AI technology. So salespeople go to offline stores to do sales. In the past, they may need to communicate with the store owner, or spend a long time doing research at the store. It may take half an hour or even an hour.
But now, all he has to do is take a photo or a video on his phone.
By calling the AI ability behind it, it can automatically help it to do this identification. Whether the toothpaste is placed on the second floor or the third floor, it can attract the attention of consumers. Toothpaste of this kind may have many shelves. It may not be enough to take a photo, but you may need to take a video or several photos. This is also a very test of the ability of AI technology to listen.
as well as the ability of price identification. This is a test of CIN's investment in AI technology. After the identification of the photo, a corresponding price listing result can be obtained. This can also motivate the partners to improve the listing.
In the past, we could only sell 7 to 8 stores per day. But now, each store does not need to spend a lot of time.
You can run 15 to 20 jobs in a day. So from the whole list, including the cost of investment, it can also achieve a qualitative improvement. So at this time, we are talking about using this kind of smart technology to help companies to achieve real cost-effectiveness.
Based on this large amount of consumer data, because we officially entered the C&A track in 2010, we have accumulated a lot of different application scenarios in the consumer industry, including the know-how of the entire industry. So in the second half of the past year, we have accumulated such data, and we have been able to work with
In October of last year, we also partnered with Huawei.
The advantage we have is our data accumulation and CRM business scenario. This kind of cooperation can be a win-win for us and help the consumer industry to make a better digital transformation. In addition,
At the end of 2022, we established an industry research institute, which aims to conduct research on the industry.
including the standardization of products and business within our company. Because our president of the industry research institute is actually an expert from Huangwei, and he has a lot of experience in Huawei. So we hope that on the one hand, through the ability of AI technology to build, and on the other hand, through the strategic leadership of the industry research institute to help us expand,
We have also completed the inventory of the six major industries last year. On the one hand, we are not only helping these companies to reduce their costs and increase their sales. On the other hand, we have also helped a lot of brands in the industry to launch a lot of new solutions.
After the launch in 2022, we have been working on expanding our eco-cooperation in the past two years. In China, we have just mentioned that we have also built a consumer product model with Huawei Cloud. In addition, we have also expanded our product by working with Tencent and Gaode to develop a D.I. smart outlet, including many of our labels.
For example, the smart freezer, the D.I., and the salesman's logo have all been sold in Huawei cloud stores. In addition, after we were listed in Hong Kong,
a very important job in the past two or three years, which is to expand our overseas business. So at that time, we used Hong Kong as a jump board to expand our international messaging business overseas, including in Latin America and the Middle East. We have also signed some strategic cooperation relations with three major operators, including our joint venture with Huawei. So this is the part that we have been working on
to build a win-win ecosystem in the domestic and overseas markets. I think that in the next year, including the next two years, our work will continue to expand. I will not go into the financial aspects here. Because we also announced our overall performance at the end of March this year.
In terms of both PaaS and SaaS business blocks, they have achieved a relatively stable growth. In the past year, due to the nationalization of deep matching, we have seen that many local banks also have a large number of software needs. In the past year, Yin Xiaoyun has also reached an income of nearly 30%.
In the past, although the sales dividend has increased, the overall ratio has significantly decreased.
At the end of the year, we can optimize the manpower cost. We have also reduced the cost of the existing personnel, including the cost of R&D. So you can see that in 2022, including the comparison in 2023, in fact, the overall cost control can be reduced to 4.4%.
Finally, I would like to focus on the business guidance for the whole year. This year, we hope to quickly break through the second growth line of the sales cloud in the case of a steady growth in revenue. So, our revenue growth for the whole year aims to reach
In the next year, we will increase our capital by 20%. We hope to achieve this goal in 2024. We also hope to have a relatively stable interest rate. In the next year, we will increase our capital
In 2024, we will launch a large number of labels. These labels will be able to achieve a rapid volume, and in the next two years, we may be able to do more coverage in small and medium-sized groups. Because what we are doing now is still a big class, we think that small and medium-sized groups are a good turning point for Xiongnu. We hope to improve the overall毛利率 through labels.
In addition, in terms of manpower optimization, including operating cost control, we can also make certain adjustments to help us achieve a win-win situation in 2024. Finally, this is a brief introduction about XuanWuYin.
You can also scan our QR code to follow XunWuMing's public account, because we will share our business progress regularly every month, including our performance activities and some related information about the operation of some capital markets.
to share more with you on this platform. You can scan the QR code to follow our official account. I think it's about time for us to open the Q&A to discuss some topics that you are interested in. Thank you.
Thank you, Mr. Fan. If you have any questions, please feel free to ask them in the chat. I have two questions. One is about the changes in the industry, such as consumption and so on. The fluctuations in the industry may affect our industry or business. The second question is,
What is the current competitive situation in the industry? What advantages do we have compared to competitors? Thank you. Okay. You just mentioned the industry. Will it affect their budget?
In fact, the overall macroeconomic situation is relatively stable. However, I think for the brands, they are not satisfied with the demand for the reduction of cost-effectiveness.
and how to expand sales from the perspective of their brand. This is also one of their final business pain points. So I think for us, as a CRM manufacturer, we are not limited to just helping them to improve efficiency. We are also doing a lot to help them to increase their mid-range sales.
to provide such tools and solutions. For example, we just talked about AIoT's smart fridge. In 2022, we targeted the mid-range stores, such as fast food, dairy, or beverage. Many of these stores' sales come from offline. Basically, 70% of China's consumer market income comes from offline.
In the current process, more than 8 million terminal stores are also a very important contributor to this income. One of the things we do is to help these brands to make a transition to terminal stores.
It is very difficult to protect their offline assets and to achieve the last 1 meter of sales conversion rate. For example, there is a camera at the door of our smart fridge. The camera can monitor the whole process 24 hours a day.
to monitor the storefront. If there is a shortage, or if it is not placed according to the brand's requirements, or if the storefront is moved, etc., the brand can be notified in time to help them do a better real-time monitoring. This is equivalent to an action that has been replaced by AI.
We believe that by cooperating with map manufacturers, we have established some 360-degree labels to help them achieve fast power outages.
For example, if Hongniu wants to expand its stores in Guangzhou and Haizhu District, such as those near Xiezilou and Yueliushui, with more than tens of thousands of stores. In the past, it may be possible for salespeople to scan stores by manpower, but now we can use big data to clean the data and help them to select some stores with high compatibility.
So all of these can really help the brand side to make a significant improvement in the end-to-end sales of the store. So I think that for the brand side, the cost-effectiveness tool may reduce the cost in terms of budget, but for the acquisition tool, there is still a big demand. So this is what we see, including in terms of AI, in fact, many brands also need
AI and software solutions to help them make better decisions. Can you repeat the second question? It's about the competitors. There is a lot of competition in the cloud market. What are our competitors and what are our advantages?
If you look back at China's smart 3M market, there are a lot of top companies in different markets. For example, in the field of real estate and finance, you will know if you pay attention to Hong Kong stocks. But I think our advantage still lies in
and have a very deep know-how in the entire consumer industry. Because for many AI technology companies, they only have AI technology, but they don't have offline application scenarios. Because when we talk about AI technology, it must be able to transform, it must be able to apply to these different scenarios and help brands to solve them.
In fact, we have accumulated a lot of know-how in the large-scale transaction industry, and we have more than 25 application scenarios. So in the new year, we may be able to expand more of these application scenarios through the D.I., through the smart icebox, including the smart assistant. So compared to the AI infrastructure, we actually have a lot of opportunities.
The biggest advantage is that we have these application scenarios. Compared to these CRM manufacturers, we actually have our own AI technology. Because in fact, you see a lot of these smart manufacturers, in fact, they may all cooperate with other AI technology companies. They don't have the ability to speak for themselves. But in fact, we already have an AI laboratory in 2016. And we have a lot of
The data from these consumer products can help us find a model that is suitable for Xiongwu. In the second half of last year, we also started strategic cooperation with Huawei Cloud. Through the application of these basic algorithms and capabilities of the Pangu model, it helps us better support the future model and better apply it to the brand side. So this is a big advantage for us.
I see. Thank you. Let's see if there are any questions from the online audience. I have one more question. You just mentioned AI. What does AI do for the company? First, does it increase the price? Second, does it help with business development? Is there anything you can share with us? Thank you.
You are talking about data, right? In fact, in terms of customers, there may be some data that cannot be shared better. But in fact, we can help some big brand customers, including big customers in the fast food and beverage industries. In fact, we can help them to increase their value.
For example, the visit rate can be increased by 30% to 40%, and there is no need to equip more salespeople.
These big customers may need to be equipped with tens of thousands of people. But now, including this smart freezer, it may not need to use salespeople. It puts the freezer there, and it automatically does some of these sifting to monitor in real time. So in fact, we think that in the future, the company may not be so dependent on manpower.
For example, in the case of D.I., a salesperson may run 8 to 10 stores a day. In the future, if we provide big data to the brand, a person may run 20 to 30 stores a day. So this can help them to do a lot of control in terms of manpower and manpower costs.
In the future, we may make more breakthroughs in the channels. We just talked about the termination of our stores and salespeople. In the future, we will consider, for example, retailers.
including the management of more offline stores. This is also a direction we want to expand. At the moment, we still hope to get started with, for example,智慧冰櫃, DI, these small labels. Because these labels can solve some of the brand's new business needs. On the other hand, these labels are also very easy to enter the small and medium-sized market.
Because these labels are relatively open-box products. I don't need to have too many real-time deliveries. I don't need to provide the cost of second opening. It's basically open-box. So its profit margin will be relatively high. So in fact, whether it's for Xuanwu or for the brand, it's a win-win cooperation.
One of the users is interested in the combination of AI with our products. What is the improvement of ARP? That's the question. As you can see, most of the pages are AI products, including the smart freezer and the smart assistant. I also mentioned the AIRDOT.
For example, we need to take a lot of photos every day. In the past, we had to spend a lot of time with the shop owner or take the photos ourselves. It may take more than an hour. Not only does the shop owner have to look at the stock of his own brand, he also has to observe the quality of the products.
They have to write these reports. But you think, 1000 salespeople may have 1000 ways to write things. How can we help them better to standardize these results, including these outputs? So we provide this AI technology to salespeople. This is our product for salespeople. It can take pictures.
AI focuses on image and video recognition.
So by taking a photo, it can identify the product within a minute. For example, how many products are on the shelves, how many SKUs are on the shelves, how many brands are on the shelves, and how many imported products are on the shelves. Then it will produce a corresponding result.
This result can also be a big incentive for salespeople. For example, if the results of the test are high, then the salespeople will have a higher chance of getting it. So it is a very complete first-row management. This is for salespeople. We just talked about AIoT and DI. In fact, these will also apply to some AI capabilities.
In terms of ARPU, we currently have more than 150 customers and ARPU can reach around 1 million RMB. In the future,
We have a new business demand, including AIGC. In the future, we will be able to open more channels. Because we are only in a few sectors of the consumer market.
We have a 20% to 30% market share. We hope to become the No.1 consumer in the industry. We hope to reach 50% market share.
such as our industry research institute, which can help us to make a strategic lead. For example, food, beverages, alcoholic beverages, and grains. In the future, we can also enter into seasoning products, including electronic consumption and electronic appliances, as well as pet daily life. In fact, these are all potential opportunities for expansion.
So I think APU can still achieve a steady improvement. On the one hand, we can expand more track. On the other hand, we can also get more big customers, including small and medium-sized customers. Thank you for your sharing. Let's see if there are any other questions.
I have another question. You mentioned that we are going to expand these. I don't know what is the difficulty of expanding after reaching a certain approval rate. For example, we are doing a lot of retail now. In fact, this kind of IT may have a lot of different scenarios, scenic areas, and so on. I don't know what you think about the space of this expansion. Thank you.
As we just said, the scene is still following the track. For example, in the food industry, we can help the brand enter the track. But for the mother-child, they may enter the mother-child store. And for drinks, they may enter the middle store, the couple's store. Because the consumer may be able to access these daily needs. These are the scenarios. So we actually
Just like you said, how to look at these opportunities, I think it's more about following the track. When we serve a large number of different track users, the application scenarios that we can send out will be more diversified. I think this is a direction.
In addition, I think China's GVCN market is also wide enough, and there is a 15% growth rate every year, so the business needs are constantly expanding.
In the future, our strategy will not only focus on serving our customers. First of all, our customers' business is very diverse, but they also need to be equipped with a certain level of implementation and delivery, because they have very unique business needs.
So for us, a very important direction in the future is to expand our small and medium-sized businesses. I think small and medium-sized businesses also have their own business scenarios. After all, these small and medium-sized businesses may not have enough experience compared to large businesses, so they also want to learn the practices of these leading customers. So our direction is to be able to, for example,
Through the experience of cooperating with large companies, we can create a standard product and make it available for everyone to use. We can help small and medium-sized enterprises to expand their business. After all, the number of small and medium-sized enterprises is definitely higher than that of large companies. So we think that the gradual coverage of small and medium-sized enterprises, and the ability to discuss quickly, is a very important
So I think in terms of application scenarios, it is likely to grow from a fast growth to a slow growth. But for Xuanwu, if we go to the mid-to-long-term, we will definitely be able to achieve an increase in quantity as well as price.
Okay, there are a few more questions here. One is, a teacher is more interested in what is the payment model of our smart ice cream? What is the penetration rate and combat rate of domestic smart ice cream now? Then the first question.
We do not produce hardware products from Bingui. We collaborate with many Bingui manufacturers, including Haier and Hashiqie.
What we charge is the AI algorithm behind it. Because there is a camera on the freezer, it will monitor the entire SKU. What we can provide to the brand is our algorithms and recognition. We charge according to the SAAS model every month.
In addition, how large is the whole smart icebox? In fact, we are also predicting that in 2024, the smart icebox market will be about 10 million units. But because of this kind of icebox, it may need to be replaced every five years. So basically there is a 20% uptrend. For us, in fact, last year we may only push
about 70,000 units. If you look at other markets, the market is relatively scattered, and there is no one big brand. So it is still a fast-expanding market scale. So for us, we also hope that this year we will go to the Huawei cloud store to do more expansion.
The next question is about the ratio of projects and subscriptions. What changes will AI bring to the business model? Which manufacturer will the big model cooperate with? Will it be introduced to the new model factory? The subscription ratio of AI... Because we are...
Half of our business is POS business and the other half is SaaS business. We are talking about subscription, which is more about the salesperson. Because in the marketing cloud, there will also be a part of the short-term business coverage. So its profit margin is about 20%. In the sales cloud, the profit margin is about 60%.
We are currently cooperating with Huawei cloud.
We rely on their platform to promote our products. We also use their algorithms to do this kind of cooperation. Can you repeat the last question you just said?
I have a question. What are the changes that AI might bring to the business model? This is also mentioned in these two articles. On the one hand, I think it is to boost sales. On the other hand, I think it is to help brands to expand their sales. I think this is definitely the future.
We hope to use advanced data intelligence and artificial intelligence to improve the sales of the terminal. After all, sales may be the only standard to verify the truth.
I think AI can really help them to achieve this result. Thank you, Mr. San. Do you have anything to add? Yes, I think this year, the competition in the market is still...
Q1 is the first time that we have disclosed our operating data. Overall, we are still developing according to the annual income guidance provided by Q1.
I hope everyone will continue to follow us. We will also hold a shareholders' meeting on the 26th of this month. If you are interested, you can scan our WeChat official account to follow our monthly progress, including some news about the operation of these capital markets. I also hope everyone can welcome everyone to communicate more with us. Thank you very much for your participation today.
Okay. Thank you, Mr. Fan. Thank you, Mr. Lu. If you have any further communication needs, feel free to contact the Debang Media Internet overseas team, Mr. Lu, or directly contact Mr. Fan. That's all for today. Thank you. Okay. Thank you, everyone.