Hong Kong - Recently, TickerWin, the leading market research firm, has released a research report "Central Processing Algorithm Application Scale Reaches RMB16.1 Billion In 2024, VIYI Algorithm Merges with Venus Listing ". 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.
The continuous upgrading of cloud computing, artificial intelligence, big data, 5G, 3D, VR/AR and other technical fields has also promoted the continuous improvement and update of central processing algorithms. With the rapid development of the Internet industry, the ecological development of data, computing power and algorithms is gradually maturing and evolving, and these many factors will jointly promote the rapid development of the central processing algorithm service industry.
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.
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.
The main purpose of the central processing algorithm service is to achieve intelligent management of data (data collection, analysis, classification, matching, etc.) and optimize the allocation of resources. Sensors and chips are the fundamental equipment for realizing "data + computing power + algorithm", while algorithm technology is the technical support for the development of big data, cloud computing and IoT. Currently, VIYI's central processing algorithm services mainly focus on the industry application in the fields of internet advertising distribution solutions and online game agent solutions.
According to the CIC Report, with the rapid growth of the demand for computing power and algorithm optimization services in the internet advertisement and online game industry, the scale of central processing algorithm application in these two industries has reached a CAGR of 38.1% in the past five years and will continue to grow rapidly. The application scale of central processing algorithms reached RMB 7.3 billion in 2019 and is expected to reach RMB 16.1 billion by 2024.
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.
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