Q1 increases revenue without increasing profits! Meige Intelligence continues to delve into the Internet of Things and empowers thousands of industries to become intelligent.

Text/Yang Jianyong

When talking about the Internet of Things, the first impression is that of emerging industries worth trillions. In fact, based on data from authoritative research institutions, the global IoT market will exceed one trillion US dollars. IDC predicts that global IoT (enterprise-level) spending will reach US$1.1 trillion by 2026.

The Internet of Things is booming, thanks to the digital upgrading of all walks of life, so that various smart devices are deployed in every corner, from smart cities to smart homes, smart cars, smart medical care to enterprise asset management equipment and industrial equipment, and then form all things The interconnected world and the application of new technologies such as artificial intelligence have driven information technology into the AIoT era, which contains trillions of dollars in market opportunities. As an important Internet of Things market in my country, IDC predicts that my country’s Internet of Things will reach US$298.12 billion by 2026.

also pointed out that in the next five years, the development of China's Internet of Things will maintain a steady and positive trend, mainly because all walks of life actively initiate digital transformation and upgrading. As an important global IoT market, my country is vigorously promoting the accelerated integration and integration of IoT and other new generation information technologies, and the scale and application of IoT connections continue to grow. IDC predicts that it will reach 5.6 billion in 2022 and will increase to approximately 10.25 billion by 2026, with a compound growth rate of approximately 18%.

The number of Internet of Things connections is expanding day by day, which is of great significance to the development of the Internet of Things industry. For manufacturers on the track, while helping various industries to digitally transform and innovate faster, it also opens up space for performance growth.

Among them, Meige Intelligent is one of the more representative companies in the Internet of Things industry chain. It is a wireless communication module and Internet of Things solution manufacturer that provides 5G and intelligent solutions for Internet of Things application scenarios in thousands of industries. The revenue of module-centered intelligent solutions has also shown steady growth in the past few years.

In 2022, Meige Intelligent’s annual revenue was 2.306 billion yuan, a year-on-year increase of 17.11%; net profit was 128 million yuan, a year-on-year increase of 8.21%. Because it is in the Internet of Things track with a market size of trillions, it has reaped the dividends of the development of the Internet of Things industry in the past few years, and its revenue has maintained steady growth. Looking at specific products, there are three product forms: intelligent modules, computing power modules, and data transmission modules, each with its own advantages and balanced development. In terms of intelligent modules, we will seize the opportunities of digitization and intelligent industry in various industries of the Internet of Things. In terms of computing power modules, we have established the most comprehensive product lineup of computing power modules in the industry. The R&D team’s application technology for large computing power platforms is becoming increasingly mature, and we are working with leading customers in various fields to expand computing power module application scenarios.

In terms of IoT application fields, there are three major application fields: intelligent connected vehicles, FWA, and traditional IoT. Throughout 2022, the intelligent connected vehicle and FWA business maintained rapid growth, and the revenue share continued to increase. Among them, the revenue related to intelligent connected vehicles more than doubled, and the performance was outstanding. The underperformance is that the revenue of the traditional IoT industry is affected by weakening customer demand. However, the downstream application fields of products have gradually formed a triangular structure. Each field has its own characteristics and advantages, and the overall business structure is healthier.

It is worth mentioning that 2022 is the 10th year that Meige Intelligent has transformed its Internet of Things business. Since the public disclosure of data in 2014, the overall operating income has increased from approximately 303 million yuan to approximately 2.306 billion yuan, an increase of 6.61% times, the compound growth rate in the past three years has remained at 43.43%; while the operating income of the Internet of Things business has increased from approximately 34.22 million yuan to approximately 2.228 billion yuan, a growth rate of 64 times, and the compound growth rate in the past three years has remained at 45.56%.

Unfortunately, this year we are stuck in the dilemma of increasing revenue without increasing profits. Revenue in the first quarter of 2023 was 443 million yuan, a year-on-year increase of 10.62%; net profit was 18.13 million yuan, a year-on-year decrease of 26.31%, and net profit after non-deductions was a year-on-year decrease of 36.66%. Regarding the reasons for the decline in profits, in the investor relations activity record table, Meige Intelligent said that in terms of profits, it was mainly affected by the increase in research and development expenses, which declined.

Data show that Meige Intelligent R&D expenses in the first quarter were 43.99 million yuan, a year-on-year increase of 77.8%. Meige Intelligent claims that it still invests heavily in vehicle-mounted products, computing power products and FWA. On the one hand, the company is optimistic about the development of intelligent new energy vehicles in the long term. The third-generation intelligent cockpit solution product has been mass-produced on the latest high-end models of customers, and has invested in pre-research work for the fourth-generation product; in addition, in order to support 5G V2X functions, The next generation TCU platform solution with computing power has also begun research and development.

On the other hand, it has increased its investment in computing power modules, and has formed a product line of computing power modules for the Snapdragon 600/700/800 multi-platform, with application fields ranging from cloud servers to drones, etc. Continuously expand into AI retail, AR glasses, action cameras and other fields. As for FWA, it has signed multiple new-generation 5G chip platforms and continues to invest in overseas markets and operator certification. With the driving effect of large AI models on computing power-related products this year, he expressed his confidence and ability to seize the emerging industry opportunities brought by the AI ​​wave. And as the demand for AI applications continues to deepen, it is expected that the shipment volume and market share of computing power modules will further increase in 2023.

Finally, the wireless communication module and Internet of Things industry is a high-prosperity market with deterministic growth. In particular, with the in-depth application of 5G and AI technology in the Internet of Things industry, especially the recent emergence of large model technology represented by ChatGPT, technologies and applications in the fields of AGI and AIGC will enter a period of rapid development.

The in-depth application of large model technology and AIGC technology has brought about explosive growth in the demand for computing power in all walks of life. At the same time, on the basis of the continuous growth in the number of connections, the Internet of Things industry will have more obvious demands for intelligence and high computing power in modules and terminal products. It will further provide intelligent operating systems and AI computing based on cellular connections. The penetration rate of Li's smart modules and AI computing modules in the overall module industry will further increase. For manufacturers targeting wireless connections for the Internet of Things, development prospects are expected to be further unleashed.

Yang Jianyong, a contributor to Forbes China, is committed to in-depth interpretation of cutting-edge technologies such as the Internet of Things, cloud services, artificial intelligence and smart homes.

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