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The controller is Chinese-American, and the company is "Foreign Investment Company Limited". Although there were some foreign companies listed on A-shares in the past, most of them were from Chinese mainland and Taiwan Province province. The landing of ArcSoft Technology in science and technology innovation board can be regarded as a landmark event of China's "further opening up".

Last Friday, June 2 1 day, arcsoft "had a meeting" at the eighth review meeting of Shanghai Municipal Committee of Science and Technology Innovation Board 20 19. This means that in a few weeks, the Science and Technology Innovation Committee will usher in the first visual AI. The result of my consideration is that this number one seems to be not only domestic but also global.

ArcSoft Technology is a provider of visual artificial intelligence technologies, products and solutions. For more than 20 years, ArcSoft has developed a series of low-level algorithms in the field of visual artificial intelligence, and made them into products and solutions. At present, ArcSoft's visual artificial intelligence technology, products and solutions are mainly used in the smart phone industry, and its customers include Samsung, Huawei, Xiaomi, OPPO, vivo, LG, Sony, voice and other manufacturers. At the same time, with the arrival of artificial intelligence, ArcSoft technology began to March into the fields of smart cars, smart homes, smart insurance, smart retail, Internet video and so on. Guided by industry demand, ArcSoft Technology has achieved continuous iteration of core technologies and continuous innovation of products in deep cooperation with global consumer electronics leaders.

In addition, ArcSoft Technology has also launched an AI open platform, which provides core technologies such as face recognition, witness verification and in-vivo detection to relevant enterprises, entrepreneurial teams and individual developers free of charge, helping small and medium-sized enterprises to break down technical barriers while also allowing their own technologies and products to land in more scenarios.

Products and solutions

At present, ArcSoft Technology provides three solutions: smart phone vision solutions, smart driving vision solutions and other vision solutions for intelligent devices in the Internet of Things, among which the revenue from smart phone vision solutions accounts for the vast majority of all operating income: 20 16 years, 67.93%, 20 17 years, 9 1.27% and 20/.

According to the different characteristics of each smart device, ArcSoft Technology puts forward targeted solutions for customers in a limited development cycle to help customers achieve the optimal balance in three aspects: "performance-power consumption-hardware cost". By adopting the visual artificial intelligence solution provided by ArcSoft Technology, intelligent devices can break through the limitation of hardware imaging ability on the basis of existing capabilities, improve imaging quality and effect, especially control and optimize intelligent computing through advanced algorithms to reduce power consumption, make many brand-new intelligent cameras and related visual applications possible, improve user experience and cost performance of devices, and increase the market competitiveness of products. At present, the visual artificial intelligence solutions provided by ArcSoft Technology have been successfully applied to smart phones, smart cars, smart homes, smart insurance, smart retail, Internet video and other scenarios, and new visual artificial intelligence technologies and product application scenarios are still being explored.

business model

ArcSoft Technology is a typical To B enterprise, which mainly sells its own technology, products and solutions to industry customers. ArcSoft Technology has a sales department, which mainly sells visual artificial intelligence algorithm software to smart phones, smart cars, smart homes, smart retailers and various IOT equipment manufacturers with cameras by direct sales.

profit model

The profit model of ArcSoft Technology is to deeply integrate the visual artificial intelligence algorithm technology with the customer's specific equipment and authorize it to the customer through the contract, that is, the customer loads the relevant algorithm software or software package on the agreed intelligent equipment.

ArcSoft claims to be an enterprise that can collect software technology licensing fees from domestic and foreign customers piece by piece, that is, according to the number of smart devices loaded with ArcSoft algorithm technology produced by customers.

market position

ArcSoft Technology is a leading provider of technologies, products and solutions in the global visual artificial intelligence industry. According to IDC's statistics, among the top 5 mobile phone brands in the world in 20 18, except for Apple, the other four mobile phone manufacturers equipped with Android system, namely Samsung, Huawei, Xiaomi and OPPO, are all equipped with visual artificial intelligence solutions for ArcSoft technology smartphones. In 20 18, the income of arcsoft from these five customers was 268,603,700 yuan respectively, accounting for 58.64% of the operating income.

According to the prospectus, the mobile phone customers adopting ArcSoft technology vision artificial intelligence solutions are: Samsung, Huawei, Xiaomi, OPPO, vivo, Meizu, Sony, ZTE, Voice, Lenovo, Motorola, HTC, Asus, etc. The top five customers in 20 18 are Samsung, Xiaomi, OPPO, Huawei and Foxconn.

technical superiority

In the prospectus, Hongsoft Technology claims to have four advantages: talent advantage, technology accumulation advantage, deep cooperation advantage of industrial chain, customer and brand advantage, among which the most important is technology accumulation advantage: first, the accumulation advantage of terminal computing and edge computing technology; The second is the layered accumulation advantage of visual artificial intelligence technology. ArcSoft claims to have mastered all the underlying algorithms of visual artificial intelligence and artificial intelligence, including human body recognition, object recognition, scene recognition, image enhancement, 3D reconstruction and virtual portrait animation. As of 20 18, 12, and 3 1, arcsoft has 129 patents (including 126 invention patents) and 73 software copyrights in the field of visual artificial intelligence. 20 18, arcsoft won the 8th "Wu Wenjun Artificial Intelligence Science and Technology Progress Award".

actual controller

ArcSoft Technology was originally a wholly-owned subsidiary of ArcSoft USA. 1994 in may, arcsoft USA was established in California, USA. In May, 2003, ArcSoft USA established ArcSoft Limited in China through its Bermuda e-Image Limited in the form of cash exchange of US dollars-to put it bluntly, it is the latter's subsidiary in China. Later, it experienced four capital increase and share expansion and four equity transfer. From September 20 17 to February 20 18, ArcSoft Limited acquired all businesses, assets and personnel related to visual artificial intelligence technology in the United States. 20 18 12, Softcom Co., Ltd. was changed into a company limited by shares and renamed Hongruan Technology Co., Ltd., which is the main body of this listing. According to the prospectus, the limited nature of ArcSoft is "Sino-foreign joint venture limited liability company", and after the change, the nature of ArcSoft Technology is "foreign-invested joint-stock company". In other words, the landing of ArcSoft Technology in science and technology innovation board means that science and technology innovation board has welcomed its first foreign-funded enterprise.

According to the prospectus, Jiarun Company is the largest shareholder of ArcSoft Technology, holding 1 18698840 shares, accounting for 32.995438+09% of the total share capital, and is the controlling shareholder of the issuer. HomeRun Company is registered in Hongkong and owned by Deng Hui.

It is worth noting that Deng Hui is not a citizen of China, but an American citizen. According to the prospectus, Deng Hui was born in May of 1962, and graduated from Washington University in St. Louis in July of199/kloc-0 with a doctorate. From August 199 1 to August 1992, he was engaged in postdoctoral research in Cavendish Laboratory, Cambridge University, England; 1August 1992 to1April 1994 worked as a product manager and engineer in Enertronics Research Inc, USA, and was the first Chinese to win the American PMDA technology achievement award. 1In April 1994, Deng Hui founded ArcSoft USA, and now he is the chairman and general manager (CEO) of ArcSoft Technology and one of the three core technicians. The other two core technicians of ArcSoft Technology are Wang Jin and Xu Jian. The former is currently the director, senior vice president and chief technology officer of ArcSoft Technology, while the latter is currently the director, senior vice president and chief marketing officer of ArcSoft Technology.

In addition, the prospectus also shows that his spouse Yang holds 5.445438+0% of the shares of ArcSoft Technology through his own company registered in Hong Kong, and the two together hold 38.4 150% of the shares of ArcSoft Technology. In addition, Deng Hui indirectly holds 0.3377% of the shares of ArcSoft Technology through the equity incentive platform Arcergate. Therefore, together with his spouse Yang, he holds 38.7527% of the shares of ArcSoft Technology and is the actual controller of ArcSoft Technology.

Competitors and benchmarking companies

In the prospectus, ArcSoft Technology mentioned five competitors: Israel's CorePhotonics Ltd, Japan's Morpho, Inc, Israel's EyeSight Technologies Ltd, China's Shangtang Technology and Vision Technology. However, these five companies are not listed companies, and there is no public financial data and other business information to check. Therefore, in the prospectus, when making a "peer comparison" of various financial data, the benchmarking companies mentioned by ArcSoft Technology are not the above five companies, but Zhongke Chuangda and Chengmai Technology in China and Dolby Laboratories in the United States.

financial data

The following table shows some financial data of ArcSoft Technology 20 16 to 20 18.

Note 1: profit before income tax.

Note 2: It mainly refers to government subsidies, the largest of which is the software VAT refund in the last fiscal year. 20 16 included in non-operating income.

Market value estimation

The following are the operating income, net profit, market value, dynamic P/E ratio and sales ratio data of three listed companies mentioned by ArcSoft Technology in the prospectus, as well as Iflytek, the most authentic A-share artificial intelligence concept stock. The last three items are data as of press time.

ArcSoft claims in its prospectus that the value of its last round of financing is 9.4 billion yuan. Compared with the valuations of the above four companies, this valuation is obviously a bit high. However, because the main business is clear and the development prospect is clear, it is reasonable to value it at a price-earnings ratio of 50 to 60 times. So I think the market value of ArcSoft Technology is still expected to reach 9.4 billion yuan (not the market value corresponding to the IPO price) after listing, and it will even exceed if science and technology innovation board is extremely crazy when he first started trading. The lower limit can be calculated according to the sales rate of 2065438+9- 10 times in 2008, and the corresponding market value is about 45 billion yuan.