Megvii Financials and Growth Examined
Megvii has already received more than a billion dollars in investment. Now, the company, a top China facial recognition provider, has filed for an IPO this week on the Hong Kong Stock Exchange.
This 500+ page IPO document reveals significant details into the size, growth, and usage of AI inside of China.
In this post, we look at the firm's financials, growth, City IoT focus, and the possible competitive threat to Hikvision & Dahua, including:
- Megvii Background
- Deeply Unprofitable, Growing Fast
- Principal Verticals
- Main Customers Mostly Security/Surveillance SIs
- Low International Presence
- City IoT Largest Segment By Far
- Covered Cities, Revenue Per Customer Booming
- Capitalizing on AI Camera Switch
- Threat to Hikvision and Dahua?
- Alibaba Ownership Stake Impact
- US Sanctions Risk
- Conclusion
********
****** *** * **** ******** ** PRC **** ************ ******** (**** ~*/**** of ***** *******), *********** *********** ********* and *****'* ****** ********. *** ******* Megvii *** ********* ***** *****' ****** success ******* ** ** ****, **** 95% ** ******'* ******** ********* ** China.
Megvii **********
******, ****-***** *** *******++********, ******** ****** *********** *** ** solutions ** *** *********** *** ********** sectors (***********, ******, *********** ***********, ***.) Megvii ** *** ** *****'* **** face *** ******** - ******** ****** over $* ******* - ***** ********,*********, ************. *** ****, **'* ** *******, has *,*** ********* ** ** **** its *** ******.
Fast *******, **** *** $***+ ******* ******* **** ****
**** ******** *******, *** **** *** **** ******* of ~$*** *******, **** ** **** revenue ********, ******* *** **** ** pace ** ******** $***+ ******* ******* in ****.
** ******* ***** ************ ** ******* has ******** **** **** ***** ** revenue *** ******, **** **** ****-***** specialists **** ******** ***** **** **** of ******** ** ******* *** **** (*** ***** ******** ********).
************
**** **** ******** ****** ** ************, losing ****** **** * ******* ******* last ****, ******** *********** **** ** a ***-*** ****** ** *****-***** ************ and *&* ********.
** *** ***** ****, ***** **** high ****** **** (******** ******** *********) and ******* ******** ******* **** ** attractive ** ********* ** *** ******* scales **.
Low ************* ********
****** ***** **% ** *** ******* inside *****, *** *** ******:
****** *** ***** ****** ******, ** generated *.*%, *.*%, *.*% *** *.*% of *** ******** **** ******* ******* of *** *** ** ****, ****, 2018 *** *** *** ****** ***** June **, ****, ************."
**** ** *** ** * *********** of ******* - *** ***'* ***** internal ******, *** *******'* ******* *** deploying ** / ****** *********** (******** ****** ***** ************ *****: **** Skynet ** ***** ****), ****** ***'* ******* ** ************** ** foreign *****.
Main *********
****** ******* *** ******** **** * main *********:
- "******** ***" (*.*. ****** *********** ** unlock ***********)
- "**** ***" (***** ******/****** ************ *****, residential *********)
- "****** ***** ***" (***** ********* *** retail)
***** ** ***** ********* ** ****:
City *** ****** */*** ** *******
**** ****** ****** **** ** ******** face *** ************** ** "**** **% of *******-***** ***********" ** ***** **** year, **** *** ** ** *** its **** ********* *******, ****** ** 73% ** *** ******* *** *** first *** ****** ** **** (~$*** million). **** *** ******* **** **** quadrupled ****-**-****, ************* ****** ****** **** the ***** *****:
Clients ****** ********/************ ***********
**** ** ******'* ******* *** ******* integrators ** *** **** ************ *** smart ********* *****:
** ****, *** *** **** ********* included (*) * ****** ********** ** China *** ***** **** ********** *********, (ii) * ****** ********** ** ***** for ***** **** ********** *********, (***) a ****** ********** ** ***** *** smart ********* *********, (**) * ******** of ****************** ******* ** ***** *** (v) * ****** ********** ** ***** for ***** ********* *********"
***** ******* *** **** ******* ********* for **% ** ******'* ******* ** 2019.
Covered ****** & ******* *** ******** *******
** **** ***, ****** **** ** now ****** *** ***** ******, ****** twice ** **** ** * **** ago:
***** ***** ******** ********* ******** **** 430 ** *** ***** ** *** year ** *** *****, ******* ******* per ******** ******** *** **** **** doubled ** ~$***,***.
*** *** ********* *** *** ***** / **** ***** ***** ****** *** Megvii.
City *** ******* *******
**** *** ** * ******* ******, with ***** ******** ** ***** ****** and "********* **********" (***** ********, *.*. face-based ****** ******* ** *********-*** ************) expected ** **** **** ********* **** over $* ******* **** **** ** over $** ******* ** ****:
AI ******* ******** ** ***** ******* ******
****** ******* ** ********** ** *** switch ** ** ******* ** *****'* smart ******, ***** ** ********* **** a **% ******** **** ****, ********** to **** **% ** ****:
********** ** ******* *** ***** ********,******* ** *** *** *** "****-*****" (i.e. ***-**-***) ******** ** "**-********* *** devices":
****** ******* *** *** ****** ******, which *** **** ****** *** "************** extract **** ***** ** ********, ****** human *******, *****, ******** *** ******* plates, ** *** ***** ***":
**** *** **** ******** ************ ***** cameras *** *** *** ******** ***** source *** ** ****** **** **** the *********** ** **** *********.
Threat ** ********* *** *****?
******'* **** *** ***** ***** ********* Dahua *** *********'* ********* *****. *** firms ********* *** **** *** ********** surveillance *****, *********** $*.* ******* ** ******** *****.
****** ****** *** *** ******* *** companies ** *** *** ******, ****** is **** ** **** *** ****** as "*** *********-*********** *** ******** ********" [******** *****]:
****** **** *****, ** **** ****** a *********** ****** ******** ** *****’* City *** ********, *****used ** ** ********* ** *********** ******** *************
****** *** ** ******** ** *********/***** in **** ***** ********** "*** **-******* players" (****** *** *** ******* ** our ******* ** ******* ****):
**** *****'* ****** ************ ********* ** AI *******, ** ****** ******* ** capture **** ******, ** ***** **** a ****** ****** ** * *** part ** *********/*****'* ********. ***** ** no ********* ** ****, *******, *** it's ***** ****** **** ******** *********** *** **** *************** *** ********* **** ***** ************ on ********* '** *******' ** ***** cities ** ***** *** *** *****.
Alibaba ********* ****** ** ************
******* ** * '********* ********' **** Megvii, **** * **.**% ***** ** the *******. **** '***********', ** **** describe, ***** **** ** ****** ** their ********* **** ***** ************ *** competition **** ************ **********. ******* ** a **** ***** *******, **** ** larger **** *********, **** ********* ** expand **** ***** **** / **** surveillance. ********, ********,******* **** * *********** ********** **** Uniview, *****'* **** ******* ****** ******** competitor.
*** *********** ** *******, ******, *** Uniview *** *** ********* ** ** a *********** ****** ** *** ***** surveillance.
One *** ******'* ****** ********* ***** ** ********
************* *** *****, ****** *** ******** ************* *** ***** ** ******* ******* * '********* ******* ****' ** the ******** ****** ******** ***** **********. The **** **** ********* ********* ********* that ***** *** ****** ** ************* identify ******* ** ********* ****** ********,*** *** ********.
******* ** **** ****** *********** ********** *** ** *********, ***** **** ********* *** ***** and ***** ***** ************ *****. ********* on *** **** ** ********, ****** could ** ****** **** ***** **** US ********** (** ** ** ***** to *** '****** ****') ** ** ******* ****** **** the ** *** *** ** ****** frozen (** *** **** *********** *********). ** ******* ****** *** **** its **** ****"*** ** *** *****"******** **************** ****** ********* *****:
** *** *** ******, ****** *** not ******* ********, *** *** ******** that ********* ** ********* *****:
***** ** ****** *** *********** ** our **********, ******** *** *********, ****** the ********* ** *** ****** *****, and *** ****** ** ******** *********, require *********** ********** **** *** ********* and ******* ** ** *****, ********* or ****** **** ** ***** ** modify *** ******** ******** *********, *** of ***** *** **** * ******** and ******* ****** ** *** ********, financial ********* *** ******* ** **********.
****** **** ********* *** ******** ** an "** ****** *********" *****, *********, includes *** ***** ********** ******* ** Schneider **************** ************ *** **** ***-*** ******. ********** has ** ****** ********** ** ************* *********-**********.
**********
****** ***** ********* ********* *** *****'* global ******* *****, ****** ** * protected **** ****** *** ****** ******. Whether **** ** ******** ** *** current *** ** **-***** ******** *** unprecedented *** ************ ******** ******* ** be ****. ************, ******, ** ******** on **** ***, ****** ***** * long-term ****** ** ********* *** *****.
******'* ******* ********** ********* ** ********** going ** ** $*** ******* ******* in ****,*** *******:
******* *** **** ******* ** ******** by **** **** ***% ****-**-**** ** around $*** *******, *** ******* ******** with *** ****** ****.
*** *** ******** *** ********* ***** to ** $*+ ******* ** ******* this ****, ***** ***** ********* ** 5x *** ****** **** ***** ***-***** facial *********** / ***** ************ ** provider ******** **** ** **** ****.
******:********* ******** ******** **** ** ******, "********* ** ********* ******* *** *********" they *** ****:
**** ******* * **** *.*% ** 2019’s ****** **** ***** **** **** tripling ***** ** *** ***** *** months ** *** ****...
****** **** ***** ** *** ****** for *.* ******* **** ($*** *******) ** ***** ** ****** **%, a ****** ******** **** *** ****** said, ****** *** ** ** ********** discussing ******** *******.
********* ***** ****, ************, **** *********** fever ******* *** *** *** ******* stream *** *** *******.
****** ** ******* ** *** * new *** ***** ******* ** ****** through **** *** ******* **** ** released *** ***** ********** **** ** August ****. ** ** ********* ******* when ****** **** ****.
** ********* ****, ************ * ******* ********** ********* **** CITIC ********** *** ***** ** **** on *** **** ***** ******* ***** Depository ******** (***), ********* *** ************ *** ******* ********** ********** ****** posted ** ******* **, ****. **** are **** ** ***** ***-*****-***** ********* within *****. ****** ** ********** ********** in *** ****** *******.
**** ************ *** *** ******* **** any **** ****** ********* ****. **** will ****** *********** ** ** ***** Megvii's ***.
* ** ** ******* ** *** VC$$$ *********. ******* *** ******* ***** should ***** ********* ***** ** ****** trajectories.
***** **** *******! ******** ***** ******* into *** ****** ** *****.