Chinese AI firm Xiaoi sees profits and sales doubling on surging demand, plans IPO
Company will seek stock listing next year to fund expansion
Shanghai Xiaoi Robot Technology sees profit and revenue more than doubling this year due to strong demand for artificial intelligence technologies, and is planning an initial public share offering for next year as it looks to further expand.
The developer of bots that run automated tasks over the internet is confident of recording sales of 500 million yuan (US$75.1 million) this year, compared to 200 million yuan in 2017, said Zhu Pinpin, co-founder and chief executive of Xiaoi. Net profit is expected to hit 100 million yuan this year, surging 150 per cent from a year earlier, he added.
“The AI sector has reached a milestone amid the wide use of the technologies in businesses,” Zhu said in an interview. “We want to raise funds to invest in new areas with our partners to expand the use of our technologies.”
The company recently delisted from mainland China’s over-the-counter National Equities Exchange and Quotations market, and plans to launch an initial public offering in 2019 to raise fresh funds to support its further growth, Zhu said. He did not elaborate on the size of the planned fundraising.
In April, Xiaoi chairman Yuan Hui had said that Hong Kong, with its regulatory environment friendly to technology start-ups, was one of the options for the company’s listing.
The global business value derived from AI is projected to total US$1.2 trillion in 2018, up 70 per cent from 2017, and is likely to top US$3.9 trillion by 2022, according to IT research firm Gartner.
China has set out plans to be the global leader in AI by 2030, with state money to be poured into research. Private companies have jumped into the business, while local governments are also pushing the technology.
On Wednesday, the Shanghai municipal government announced plans to set up investment funds worth at least a total of 100 billion yuan over the next two or three years to bolster the development of AI-related businesses.
Xiaoi posted net losses of 13.9 million yuan on revenue of 65.1 million for the first half of 2017, but its sales shot up from the second half of last year on surging demand for AI technologies.
Zhu said financial institutions and government departments, each accounting for about 20 per cent of its total businesses, will continue to the major driving forces for its increasing sales. It has more than 1,000 clients, including financial institutions such as HSBC and BOC International in Hong Kong and CTBC Bank in Taiwan.
In 2019, Xiaoi envisions sales of 1 billion yuan, double the targeted amount of 500 million yuan for this year.
Xiaoi’s investors include state-backed financial conglomerate Everbright Group and e-commerce giant Alibaba Group Holding, which owns the South China Morning Post.