AIGC Accelerates Landing, and Wanxing Technology's Revenue Grows by 30.69% in the First Three Quarters | Looking at the Financial Report

Under the AIGC boom, multiple A-share listed companies have experienced rapid development, with significant increases in revenue and profits. Previously, Precedence Research predicted that the global generative AI market size is expected to reach $118.1 billion by 2032, with a compound annual growth rate of 27%.

Image source: Wanxing Technology Performance Announcement

Recently, Wanxing Technology released its performance report for the first three quarters of this year. Data shows that Wanxing Technology achieved a revenue of 1.096 billion yuan in the first three quarters, a year-on-year increase of 30.69%; The net profit attributable to the parent company was 65.068 million yuan, a year-on-year increase of 166.91%.

In the announcement, Wanxing Technology pointed out that the increase in revenue and profit is mainly due to the improvement of the company's original product competitiveness and the increase in sales revenue caused by the expansion of new products. Thanks to the increase in revenue, the net cash flow generated by Wanxing Technology's operating activities also increased by 152.66%.

Wanxing Technology's quarterly revenue; Changes, Titanium Media App Drawing

However, it should be pointed out that compared to the high-speed growth at the beginning of the year, Wanxing Technology's quarterly revenue growth has slowed down slightly. It can be seen that in order to further promote new products, it has further increased its investment efforts. Performance shows that Wanxing Technology's operating costs increased by 43.97% in the first three quarters, mainly due to the increase in AI server fees and revenue growth driving the increase in platform fees; Sales expenses increased by 32.68%, mainly due to intensified market competition, increased traffic costs, and the launch of new products.

According to data released by QuestMobile, with the gradual maturity of the three underlying capabilities of computing power, algorithms, and data, generative AI has entered an accelerated growth period, and AIGC has become a new trend after PGC and UGC. In terms of research and development, during the reporting period, Wanxing Technology's research and development expenses increased by 49.71 million yuan, a year-on-year increase of 20%.

Official information shows that in terms of products, the main overseas products under Wanxing Technology have been connected to Azure OpenAI service in the first half of the year, and products such as Wanxing Meow Film, Yitu Pictorial, and Yitu Brain Map have been launched with AIGC function. The announcement shows that the Wanxing PDF/PDElementV10.0 version will be launched at the end of August, creating a new AI toolset and optimizing the interactive experience of the intelligent assistant Lumi.

Recently, Wanxing Technology also released the AI video creation software WondershareFilmora13, which has a built-in creation assistant Copilot. Users can quickly obtain information to assist in creation through dialogue with the AI assistant, or use the one click assistance function to quickly complete editing and creation. Facing the domestic market, Wanxing Technology has also launched Wanxing Meow Film 2024, which includes AI creation functions such as quick text editing and intelligent voice separation.

AVIC Securities pointed out in its research report that the company has launched multiple AIGC products and may be the first to achieve performance in the short term. The cooperation with OpenAI and the company's continuous investment in research and development will lead to product iteration and upgrading. It is expected that the company's net profit attributable to the parent company will be 104/139/174 million yuan from 2023 to 2025, maintaining a "buy" rating.

In addition, with the assistance of AIGC's new technology, Wanxing Technology has seen significant improvements in both its business and stock price, with its stock price rising to 172 yuan in June. However, after the high point, the stock price of Wanxing Technology experienced a wave of decline. As of the close of last Friday, Wanxing Technology's stock price has dropped 54% from its peak.

Regarding the fluctuation of stock prices, Tang Fangxin, the strategic development manager of Wanxing Technology, once told Titanium Media App that compared to short-term stock price fluctuations, what is more needed is to make good products and meet user expectations, which is what we pursue. No matter how high the short-term rise is, if there is no product and no actual technical support, it will be a foam.(This article premieres the Titanium Media App, authored by Du Zhiqiang and edited by Zhong Yi)