Original title: iFLYTEK Smart Education’s first half revenue of 2.2 billion education informatization market strategy adjustment
21st Century Business Herald reporter Wang Feng reported in BeijingiFLYTEK (002230.SZ) recently released its 2022 semi-annual report. In the first half of 2022, iFLYTEK’s revenue was 8.023 billion yuan, a year-on-year increase of 26.97%; net profit was 278 million yuan, a year-on-year decrease of 33.57%.
Among them, smart education is still the largest business of iFLYTEK, with revenue of 2.205 billion yuan, a year-on-year increase of 27.38%.
“The smart education business of iFLYTEK continues to maintain a stable and healthy development trend.” Jiang Tao, secretary of the board of directors of iFLYTEK, said at the performance briefing on August 23.
iFLYTEK’s smart education business is divided into services such as overall solutions for teaching students in accordance with their aptitude for the government (G-end), smart homework and following-school services for schools (B-end), and personalized manuals for students (C-end), products such as learning machines.
In the first half of this year, with changes in the market situation, different business line models of smart education have been adjusted. On the C side, the sales of learning machines continued to grow, and the coverage of products at different price points was increased.
At the G-end and B-end, the changes in the education informatization market are more obvious.
“It turned out that our coverage strategy was to select the best, the strong, and the key points. Now we need to fully sink.” Liu Qingfeng, chairman of iFlytek, said at the performance briefing. It is reflected in the product side. In addition to projects that cost hundreds of millions of yuan, the number of small projects with a bid amount of hundreds of thousands of yuan is increasing rapidly.
Full market sinking
The overall solution of teaching students in accordance with their aptitude is the “flagship service” of iFLYTEK Smart Education.
According to iFLYTEK’s semi-annual report, the overall solution of teaching students according to their aptitude through large-scale implementation and application, with the help of informatization to improve the level of refinement of regional teaching management; with the help of intelligent teaching assistants, it can help teachers reduce the burden of correction and lesson preparation; build a student-oriented learning environment portraits to improve teaching accuracy.
In the first half of this year, the overall solution of teaching students according to their aptitude was implemented in five places: Wuhu City, Anhui, Fucheng District, Mianyang, Guanshanhu District, Guiyang, Shaxian District, Sanming, and Baoding City, Hebei, and has been applied in more than 40 places.
In terms of business model, the revenue of a single project is very large. According to Liu Qingfeng, for example, the business scale of Bengbu is regarding 1.6 billion yuan, the Qingdao West Coast New Area is regarding 800 million yuan, and the Wuhan Economic and Technological Development Zone is regarding 500-600 million yuan.
Such large-scale education informatization projects are often a local demonstration project, requiring “the government to hold a special meeting, and following research, come up with future new budgets to invest.” Liu Qingfeng said, “But now there are many local financial There are projects with budgets at the beginning of the year, and there are also many projects with a scale of several million yuan.”
For educational informatization suppliers, the number of these projects explicitly included in the government budget is more, and the funding guarantee is more stable. Liu Qingfeng introduced that through the layout last year and the first half of this year, the proportion of these “small G and small B projects” in the G-end business of iFLYTEK’s smart education will increase significantly.
A typical example is the following-school service business. The Ministry of Education is promoting local education authorities to build an following-school service management platform for the management of following-school service registration, course selection, and fees, as well as data collection and utilization. Currently, iFLYTEK has built platforms in more than 200 districts and counties across the country.
According to the bidding documents of multiple county-level following-school service management platforms, the price of a single target is more than 200,000 yuan. Although the unit price is low, there is a lot of room for extension, and it can connect with iFLYTEK’s following-school service solutions.
For example, homework is an important part of following-school services. iFLYTEK has implemented smart homework solutions in Beijing, Zhejiang, Hefei, Shenzhen, Nanjing and other places, providing homework library construction, hierarchical personalized homework layout, homework learning data collection and intelligent Auxiliary correction and other services.
In addition, following-school services also require a large number of quality courses. In the future, iFLYTEK’s self-operated and cooperative quality courses, SaaS services and other products can be introduced into the platform for schools to purchase.
“The following-school service platform is the biggest strategic stage following the ‘double reduction’. This business was fully invested in the first half of the year, and gradually began to generate operating income in the second half of the year.” Liu Qingfeng said, “After the withdrawal of the hundreds of billions of education and training market, the largest One of the stages to undertake is the school’s following-school service platform.”
In order to sink into the “small G and small B projects” market, iFLYTEK has added more than 2,000 people since the second half of last year, and a considerable part of them have sunk to the front line, increased the reach rate, and strengthened the product operation and service guarantee for the front line. .
This directly led to the sales expenses of iFLYTEK reaching as high as 1.37 billion yuan in the first half of this year, a year-on-year increase of 37.64%. “Unless there are major new business opportunities in the future, sales expenses will not grow as fast as they are now.” Liu Qingfeng said.
Machine learning will double throughout the year
The learning machine is an important intelligent hardware of iFLYTEK. In the first half of this year, iFLYTEK’s sales of AI learning machines increased by over 101%.
“The sales of iFLYTEK learning machines in the first half of the year doubled year-on-year, but in fact it did not meet our expectations, mainly because of the impact of logistics in the first half of the year, social confidence and the overall consumption index were also affected.” Liu Qingfeng at the performance briefing said.
China’s learning machine product form started from the learning tablet. Previously, it has mainly experienced two stages of “electronic teaching aid” tablet and “online learning” tablet, that is, learning electronic teaching aid and online class through tablet.
At present, mainstream manufacturers have launched AI learning machines, which can diagnose students’ test questions through knowledge graphs, find weak knowledge points, and then automatically push relevant video learning content and topics to achieve targeted learning.
Both the content carried by the learning machine and the system itself are expanding. For example, the iFLYTEK AI learning machine has added content such as science, calligraphy, music, and mental health classes. “Through our own research and development, joint research and development and direct cooperation with third parties, more and more content will be put into the learning machine.” Liu Qingfeng said.
In terms of the system, with the improvement of R&D strength, more educational hardware will have independent operating systems, which will improve the platform attributes of the learning machine, thereby improving the openness of the learning machine to external resources, and is also conducive to the development of more complex Knowledge graph, so as to schedule resources more accurately.
iFLYTEK is facing increasingly fierce competition in the field of learning machines. Internet companies such as Baidu and NetEase that also have accumulated technologies in the field of artificial intelligence, as well as education companies with high-quality resources such as New Oriental and Gaotu, have launched learning machines.
However, Liu Qingfeng said that in 2022, the sales of learning machines will definitely double. “A large number of channels and agents around learning machines have begun to enter a virtuous circle, and the development of channels is getting healthier and will support longer-term healthy growth.”
On the other hand, iFLYTEK increased the sales of small-screen hardware for student terminals for schools in the first half of this year, which increased the importance of the integration strategy of software and hardware.
“As learning machines are used more and more in schools, the demand for parents to buy them home following class will increase,” said Liu Qingfeng.
Compared with pure software sales, the integration of software and hardware temporarily affected the company’s gross profit margin. In addition, the price of the flagship model of iFLYTEK’s learning machine is relatively high. After covering the low-priced product line in the first half of the year, it also affected the gross profit margin. In the first half of the year, the gross profit margin of education products and services was 52.16%, a decrease of 2.4% year-on-year.
However, Wu Xiaoru, president of iFLYTEK, believed at the performance briefing that the integration of software and hardware can further improve customer satisfaction, which is the company’s first consideration.
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