Hong Kong - Recently, TickerWin, the leading market research firm, has released a research report "VIYI Algorithm, A Central Processing Algorithm Service Provider, Will Be Valued at $400 Million through the SPAC and Venus Merger ". On June 10, 2021, VIYI Algorithms, Inc. (" VIYI Algo "), a Cayman Islands exempted company operating in China announced that it would go public through a merger with Venus Acquisition Corporation, a special purpose Acquisition Company (SPAC). In connection with the transaction, VIYI algorithms is valued at $400 million.
Leading bespoke central processing algorithm service provider in China enjoying first-mover advantages and rapid revenue growth
VIYI ranks as one of the top five Chinese companies for central processing algorithm services. According to the CIC Report, as of 2020, VIYI has captured 5% of the market share for central processing algorithm services provided to internet advertisement and online gaming acceleration industries.
VIYI is ideally positioned to grow its revenue quickly as a leading central processing algorithm service provider in China. According to the CIC Report, VIYI is the only company amongst its competitors to provide central processing algorithm service solutions in both internet advertisement and online game acceleration industries. As a result, since 2017, VIYI's revenue growth has been increasing on a cumulative basis, specifically, VIYI has achieved a year-on-year revenue growth rate of 31.9% in 2018, 52.6% in 2019, and 176.8% in 2020.
As for why I choose SPAC listing, I believe that compared with the traditional IPO listing, listing in the form of SPAC is much faster.
SPAC not only takes a shorter time frame, but also helps companies raise money faster. More importantly, the SPAC can bypass the SEC's oversight and scrutiny to the maximum extent possible. Based on the recent choices of Universal Music, Nextdoor, Aurora, and this time Viyi algorithm, combining listed U.S. stocks through a special purpose acquisition company (SPAC) remains the preferred option for many companies that have yet to go public.
VIYI is dedicated to the development and application of bespoke central processing algorithms.
VIYI provides comprehensive solutions to customers by integrating central processing algorithms with software or hardware, or both, to streamline their digital services for end-users or technological development purposes, thereby helping them increase the number of customers, improve end-user satisfaction, achieve direct cost savings, reduce power consumption, and achieve technical goals. The range of VIYI's services includes algorithm optimization, accelerating computing power without the need for hardware upgrades, lightweight data processing, and data intelligence services. VIYI's ability to efficiently deliver software and hardware optimization to VIYI's customers through bespoke central processing algorithms serves as a driving force for VIYI's long-term development.
Currently, VIYI's technology and solutions are mainly in the field of internet multimedia video advertising, internet gaming entertainment, where VIYI has historically been successful in providing advertising distribution solutions, online game agent solutions, software services, and comprehensive solutions for enterprise customers. Starting in September 2020, VIYI developed its intelligent chips solutions by acquiring 100% owned subsidiary Fe-da Electronics as VIYI believes that the demand for algorithms in the semiconductor sector is growing rapidly, representing huge market potentials.
In the mid-to-long term, VIYI will continue to adhere to its strategic mindset. By improving upon each iteration of VIYI's one-stop intelligent data management solutions made possible by VIYI's proprietary central processing algorithm services, VIYI can help customers to enhance their service efficiency and make model innovations in business, and actively enhance the industry value of the central processing algorithm services in the general field of data intelligent processing industry.
VIYI derives its revenue primarily from (i) central processing algorithms services for the internet advertisement and internet gaming industries and (ii) intelligent chips and services, including software development.
VIYI's revenue from central processing algorithms for the year ended December 31, 2020 was RMB 307.8 million, which represents an increase of RMB 196.6 million, or 176.8%, from VIYI's total revenues of RMB 111.2 million for the year ended December 31, 2019. VIYI's gross profit for the year ended December 31, 2020 was RMB 125.2 million, representing an increase of RMB 61.1 million, or 95.3%, from RMB 64.1 million for the year ended December 31, 2019. VIYI's net income for the year ended December 31, 2020 was RMB 91.5 million, representing an increase of RMB 48.1 million, or 110.7%, from RMB 43.4 million for the year ended December 31, 2019.
China's increased demand for central processing algorithm services in internet advertisement and the online game industry
Effective central processing algorithm solutions can empower downstream industries experiencing high demand for data analysis and computing power optimization, which applies to internet advertising, internet game applications, finance, retail, logistics, and other industries. Because of huge downstream demands, the overall market of central processing algorithm services is enormous.
According to the CIC Report, revenue of central processing algorithm services derived from internet advertisement and online gaming alone has grown from RMB 2.2 billion in 2016 to RMB 6.9 billion in 2020, representing a CAGR of 32.7%. This market is expected to maintain a rapid growth trend, expanding at a CAGR of 15% during the period from 2020 to 2025. VIYI believes that its position as an industry leader in a fast-growing market with favorable industry trends will greatly benefit VIYI in achieving sustainable and rapid growth in the future.
Algorithmic services have a great opportunity to develop
With the development of the economy and the internet industry, the global spending on IT continues to increase and the central processing algorithm service has a huge room for development in the internet industry. With the emphasis on efficient operation and refined management of algorithmic services, enterprises have increasing demands for central processing algorithms integrated solutions and high value-added services solutions. With the diversified development of the internet industry, there will be increasing needs for application scenarios of central processing algorithms. The central processing algorithm services will be applied in various industries, including advertising, games, finance, industrial internet, telecommunications, energy, logistics, urban management, biomedical, social security and leisure and entertainment.
With the rapid development of information technology and industrial information transformation, the amount of data will maintain considerable growth, which drives the rapid growth of data asset management demand, resulting in a huge demand for central processing algorithm services. Big data analysis can reveal valuable insights into different application scenarios. However, analyzing all the data to improve the decision-making process proved too difficult for the human brain. Central processing algorithms can automate big data analysis. Therefore, the rapid expansion of data volume in China is expected to drive the demand for big data analysis and further increase the demand for central processing algorithms.
With the continuous development of the Internet, cloud computing, the Internet of Things and smart devices, multimedia data shows explosive growth. The real-time dynamic transmission of text, image, voice, video and other information between users through the network as the carrier has exceeded the limitations of individual attributes, and the demand for realizing cross-media interaction, intelligent search and personalized recommendation has been further released. The explosive growth of data will continue to drive the growing demand for central processing algorithm services.
Big data services focus on the application level. Through the management, mining and analysis of enterprise data assets, they empower every link of enterprise operation and improve operational efficiency. As a result, demand for central processing algorithm services is strongest in industries with large data volumes and high data structures, such as the Internet, finance and government services.
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