Core Viewpoint - Beijing DeepZero Technology Co., Ltd. (DeepZero) is seeking to list on the Hong Kong Stock Exchange, but it faces significant challenges as its revenue and net profit are declining in contrast to the high growth rates of the industry [1][4]. Company Overview - DeepZero claims to be the leading company in China's marketing and sales decision AI application market, yet it has reported a decline in both revenue and net profit for 2024 [1][4]. - The company aims to use the funds raised from the IPO for continuous R&D, expanding its sales network, seeking strategic acquisitions, and general corporate purposes [2]. Financial Performance - Revenue for DeepZero from 2022 to 2024 was 5.43 billion, 6.11 billion, and 5.38 billion RMB, respectively, with a year-on-year decline of 11.9% in 2024 [4][5]. - Net profit figures for the same period were 59.36 million, 60.66 million, and 21.97 million RMB, showing a significant year-on-year decline of 64.5% in 2024 [4][5]. Market Position - DeepZero claims a market share of 2.6% in the marketing and sales decision AI application market, ranking first, but the top three companies only hold a combined market share of 7.1% [7][8]. - The competitive landscape includes several AI giants, such as Fourth Paradigm and SenseTime, which have significant advantages in the market [8][9]. Profitability and Margins - The overall gross margin for DeepZero from 2022 to 2024 was 30.9%, 31.2%, and 27.3%, indicating a downward trend [10][11]. - The gross margin for its intelligent advertising business was 27.7%, 30.7%, and 27.4%, while the intelligent data management business saw a more significant decline from 45.9% to 26.6% [10][11]. R&D Investment - R&D expenditures for DeepZero from 2022 to 2024 were 46.87 million, 54.06 million, and 56.34 million RMB, representing only 8.6%, 8.8%, and 10.5% of total revenue, which is significantly lower than industry peers [13][15]. Customer Concentration - Revenue from the top five customers accounted for over 50% of total revenue from 2022 to 2024, indicating a high concentration risk [16]. - The largest customer, Alibaba, has seen its contribution drop from 4.4 billion RMB in 2021 to approximately 0.9 billion RMB in 2024, leading to a shift in the customer base [17].

Core Viewpoint - After failing to list on the ChiNext board, the company is now attempting an IPO on the Hong Kong Stock Exchange, but it faces significant challenges as its net profit for 2024 is projected to decline by over 60% year-on-year [1][3]. Company Overview - The company, Beijing Deep AI Technology Co., Ltd. (Deep AI), is a leading decision-making AI technology firm in China, ranking first in the marketing and sales decision-making AI application market [1]. - The company focuses on decision-making AI applications with strategic emphasis on marketing and sales scenarios, including intelligent advertising and data management [1]. Financial Performance - For the fiscal years ending December 31, the company's revenue figures were approximately RMB 542.9 million in 2022, RMB 611.2 million in 2023, and projected RMB 538 million in 2024 [2]. - Corresponding net profits were approximately RMB 59.4 million in 2022, RMB 60.7 million in 2023, and are expected to drop to RMB 21.5 million in 2024, reflecting a year-on-year decline of 64.52% [3]. - The gross margins for intelligent advertising were 27.7% in 2022, 30.7% in 2023, and are expected to decrease to 27.4% in 2024, while for intelligent data management, the margins were 45.9%, 33.3%, and are projected to fall to 26.6% respectively [3][4]. Market Insights - The market size for decision-making AI applications in China has significantly increased from RMB 10.6 billion in 2020 to an expected RMB 34.5 billion in 2024, with a compound annual growth rate (CAGR) of 34.3% from 2020 to 2024 [2]. - The market is projected to reach RMB 161.5 billion by 2029, with a CAGR of 36.2% from 2024 to 2029 [2]. Shareholder Structure - The controlling shareholders, Huang Xiaonan and Xie Peng, hold approximately 20.96% and 14.77% of the company's equity, respectively [5]. - An agreement for unified voting actions among shareholders was established to ensure consensus during shareholder meetings [5]. IPO History - This is not the company's first attempt to enter the capital market; it previously sought to list on the ChiNext board but withdrew its application in June 2024 after entering the inquiry stage in July 2022 [5].