"A smart company does something but doesn't. If everyone else can do something, your value is not significant," said Shen Ziyu, co-founder, chairman, and CEO of Yikatong Technology, in an interview with the Daily Economic News.
In Shen Ziyu's view, China is not lacking in enterprises that manufacture electric vehicles or complete vehicles, but in companies that specialize in systems, chips, and AI technology, because these are things that automotive companies want to own but find it difficult to do so in the short term.
Recently, Yikatong released multiple new intelligent automotive technology products, including three computing platforms, one intelligent driving computing platform, two products upgraded from the original intelligent cockpit platform to a central computing platform, a vehicle grade intelligent driving chip, and a LiDAR.
Shen Ziyu emphasized that Yikatong Technology aims to become a provider of incremental components for intelligent electric vehicles. "The new solution we have launched can meet the increasing demand for intelligence in the global automotive market and promote the integration and development of the industry," said Shen Ziyu.
According to public information, Yikatong is an automotive intelligent technology company jointly founded by Li Shufu, Chairman of Geely Holding Group, and Shen Ziyu. It was founded in 2017 and is committed to creating a fully stack based automotive computing platform.
"Automobile companies not only need to do a good job in their entire vehicle products, but also have reserves in the core technology field, which is the mission entrusted by Li Shufu to Yikatong." Shen Ziyu told reporters that the investment in intelligent technology is huge, and it is very difficult for an automobile company to complete all research and development, and still be able to make profits. ".
It is reported that at the beginning of its establishment, Yikatong mainly provided intelligent car infotainment systems for Geely Automobile's brand models, supporting the intelligence of models such as the Lynk&Co 08 EM-P, smart series, Polestar 4, and Volvo EX30.
Afterwards, Yikatong began to expand its social circle and achieved an IPO on NASDAQ by the end of 2022. "In the past few years, Yikatong has not put too much effort into doing business outside of Geely, mainly because it felt that the difference was not enough. However, now through the ecological alliance, Yikatong has two core differences, including the Flyme Auto based on the Meizu operating system Flyme and the chip." Shen Ziyu said that in Yikatong's current business revenue, Geely and non Geely have a revenue ratio of 7:3. In the future, this ratio will be adjusted to 5:5.
According to the financial report, in 2023, Yikatong's total revenue was approximately 4.67 billion yuan, a year-on-year increase of 31%; The net profit attributable to the parent company was approximately -94 billion yuan, a year-on-year increase of 39.9%; The gross profit margin is 27%, higher than the industry average.
"The diversification of the company's business, coupled with stable internal operations and effective cost and expense management, has led to the growth of Yikatong's revenue and profit scale, resulting in a significant narrowing of operating losses year by year." Shen Ziyu explained that this development trend is bound to continue in 2024 and 2025, and Yikatong must remain committed to moving towards comprehensive profitability.
Zhou Jing, CFO of Yikatong, also stated in an interview with reporters that Yikatong's goal is to quickly achieve profitability. "Our aggressive internal goal is to achieve breakeven by the end of 2024 and start making profits after 2025." Zhou Jing revealed to reporters that this is mainly due to the gradual expansion of Yikatong's external business and the increasing diversification of customers.
Recently, Yikatong announced a strategic upgrade with China FAW to jointly build an intelligent computing platform and the Hongqi OS ecosystem. "Our in-depth cooperation with China FAW is not simply a relationship between Party A and Party B, but rather a joint research and development team that has been jointly established to deeply customize the Hongqi OS. Yikatong will provide it with the same overall solution as the Lynk&Co 08." Shen Ziyu said that this in-depth cooperation between the two sides does not only refer to a certain car model, but also a comprehensive strategic cooperation, representing that the future cooperation results will cover all models of China FAW series such as Hongqi and Pentium.
In Shen Ziyu's view, it is an inevitable trend for Chinese technology companies to go global. "Moving from whole vehicles to technology is the current approach of Yikatong. In the process of globalization, Yikatong has strong competitiveness. Through the differences in technological core competitiveness, Yikatong must have price control over the upper level and premium ability over the lower level." said Shen Ziyu.