On August 24, iFLYTEK released its 2021 semi-annual financial report which, along with the performance briefing, showed that the company’s overall performance has continued to improve. There has been steady progress in key areas including smart education and smart healthcare and advancement in smart hardware and smart on-vehicle devices. The company’s Open Platform is rapidly developing and its product strategy of “Open Platform + Diversification” has been producing remarkable results.
During the reporting period, iFLYTEK achieved revenues of 6.319 billion yuan, a year-on-year increase of 45 percent; a net profit of 419 million yuan, constituting growth of 62 percent year within one year; and a net profit excluding non-recurring gains and losses of 209 million yuan, rising by 27 times yearly. iFLYTEK has not only improved its business, but has also expanded within the period.
By pursuing a product strategy of “Open Platform + Diversification”, iFLYTEK’s Open Platform generated revenues of 1.293 billion yuan over the first half of 2021, rising by 132 percently. The number of developers joining the platform has also increased.
Among the fields where iFLYTEK has applied its artificial intelligence (AI) technology, the smart education and smart healthcare sectors have both seen over 30 percent increases. The smart education business reported an increase of 76 percent in its accepted contract amount while the smart healthcare business further improved its products and is exploring business models. Both areas are expected to achieve an even greater level of growth in the second half.
In addition, the business of smart hardware for office work and education increased by 77 percent and the smart on-vehicle device business grew by 74 percent, emerging as new growth points among the diversified AI products and solutions industries. The company continues to experience a promising outlook for overall growth in the future.
iFLYTEK’s smart education and healthcare business continue to deliver value by meeting rigid demands
The Chinese government recently issued a policy that seeks to ease the burden of excessive homework and off-campus tutoring for students and to return the responsibility of education to the schools. To realize this goal, iFLYTEK believes that AI should be more deeply integrated with school education programs to improve student research and school management.
This policy is consistent with iFLYTEK’ pursuit of "teaching students in accordance with their aptitude". The company has been working on solutions mainly for on-campus education, aiming to provide personalized learning through AI and avoid ineffective repetitive training. AI not only reduces the burden on teachers and students by improving learning efficiency, but also meets the government’s need to promote well-rounded education and nurture creative talents.
iFLYTEK’s regional solutions for teaching in accordance with students’ aptitude have been adopted in many regions including Bengbu of Anhui Province, Xihaian New District of Qingdao, Wuhua District of Kunming, Changzhi of Shanxi Province, successfully illustrating the role AI can play in the educational mission of schools.
These positive embodiments of the potential of AI in education have led to other regions seeking to integrate AI into their educational programs. Earlier this year, iFLYTEK won bids for smart education projects in Jinshui District of Zhengzhou and Wuhan Economic & Technological Development Zone, further assisting many candidates for the National College Entrance Exam as they begin studying.
The overall accepted contract amount of iFLYTEK’s smart education business increased by 76 percent year over year in the first half. Its revenues in the period were 1.731 billion yuan, up 31 percent year over year. While this is not as high as the company’s overall growth, the growth in iFLYTEK’s smart education is still increasing at an expedient and sustainable rate especially when combined with the accepted contract amount.
At the performance briefing, iFLYTEK’s Chairman Liu Qingfeng explained that the company doesn’t regard its solutions for teaching in accordance with students’ aptitude as simply a single sales project, but rather as a long-term strategy for success.
In fact, the company’s education business has been experiencing sound development. iFLYTEK utilizes a systematic approach to the implementation of its management mechanism and educational philosophy, as well as its long-term pursuit of improving the value of education.
As for its smart healthcare business, iFLYTEK has been seeking to improve the capacity of grassroots doctors with AI and to achieve a greater distribution of high-quality medical resources. According to the financial report, iFLYTEK’s AI Medical Assistant has been adopted in over 30,000 local medical institutions in 200 counties and districts within more than 20 provinces, serving more than 50,000 grassroots doctors while assisting in more than 200 million diagnoses. Over the first half of 2021, the company’s smart healthcare business gained nearly 100 million yuan in revenue, up 34 percent year over year.
Mr. Liu said that in the first half of the year, the company’s healthcare business group worked extensively in product improvement and system iteration. The healthcare business team added urgently-needed functions, including a multi-point trigger for intelligent prevention and control of major infectious diseases and critical diseases, to the iFLYTEK AI Medical Assistant. Additionally, the group continued to explore new business models for the AI Medical Assistant to, for example, improve diagnosis and treatment capabilities through operation and maintenance and integrate the product with medical insurance payment, family doctor follow-up calls, insurance company services, and smart hardware. With these improvements in mind, Mr. Liu reiterated the company’s expectation that iFLYTEK’s smart healthcare business will see an even greater growth in the second half.
Speaking about the proposed spin-off of iFLYTEK’s smart healthcare business for independent listing, Mr. Liu said that the spin-off is for further increasing R&D investment, promoting talent introduction, and building a future leading company in China's "AI + Healthcare" field.
iFLYTEK reported a fast increase in smart hardware revenues and flourishing business in diversified fields
Thanks to systematic innovations, iFLYTEK has enjoyed a fast increase in growth for both its smart hardware and smart on-vehicle device business, raising expectations about the company’s business in diversified fields.
iFLYTEK has actively planned its smart hardware business, launched a system of diversified products based on its core technology innovations, and formed two major categories of AI products for office work and education.
The company’s smart hardware for office work mainly focuses on market demand for “AI+ Office Work” scenario-based applications and solving problems of the users. The company has launched AI products including the iFLYTEK Smart Recorder, the iFLYTEK AI Notebook, and the iFLYTEK Translator to increase users’ efficiency at work.
iFLYTEK’s smart hardware for education meets rigid social demands and aims to achieve teaching in accordance with students’ aptitude through “AI + Smart Hardware” to reduce the burdens on teachers and students and improve their efficiency, in accordance to the government’s goal of conducting all-round education and nurturing creative talents.
For example, the recently launched iFLYTEK Learning Pad T10 is characterized by its function of AI-supported diagnosis for learning problems, which enables recommendation of personalized learning content when combined with knowledge graph technology, reducing the burden of students while increasing their efficiency.
It was also revealed at the performance briefing that among iFLYTEK’s consumer business, smart hardware for office work reported a year-on-year increase of 41 percent in revenues. Additionally, the revenues of smart hardware for education from the smart education business reached 58 percent in growth (Sell in). Based on industry practices and the data of smart hardware sold to end consumers (Sell out), the gross merchandise volume (GMV) of iFLYTEK’s smart hardware in the first half increased by 77 percent year on year.
In the meantime, facing the wave of intelligent upgrades in the automobile industry, iFLYTEK has improved its smart on-vehicle device business through systematic innovation; from offering on-vehicle voice interaction modules, to now providing overall smart vehicle solutions. Such a strategy has achieved a 74 percent growth in the revenues of smart on-vehicle devices over the first half. iFLYTEK will take the software system for smart vehicles as a key direction of future development as the company achieves constant breakthroughs in AI application in the automobile industry.