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SenseTime Group Reports 2022 Interim Results
Smart Auto and Smart Life growth accelerates while
SenseCore achieves commercialization breakthrough
[Hong Kong, 25 Augsut 2022] – SenseTime Group Inc. ("SenseTime", or the "Company", stock code: 0020) today announced its interim results for the six months ended 30 June 2022 (“1H2022”).
The first half of 2022 was full of challenges, both domestically and internationally. We have been actively responding to changes in the macro environment, such as COVID-19, while continuing to lead innovation in the AI industry. In the first half of 2022, our Smart Auto and Smart Life segments saw substantial growth. Our new infrastructure, the Shanghai Artificial Intelligence Data Center (“AIDC”), commenced commercial operation and have received strong market demand which is driving our R&D quality to higher new ground.
With the digitalization progress of various industries accelerating during the pandemic, our Smart City and Smart Business segments rapidly recovered as of June. Thanks to our advanced AI infrastructure and diversified business profile, we have maintained our industry-leading market share while demonstrating strong commercial resilience. We remain confident in the long-term growth of AI.
Business highlights in 1H2022:
● The Company's total revenue was RMB1.42 billion, with gross profit margin of 66%.
● Smart Auto and Smart Life segments achieved significant growth. The revenue of Smart Life increased by 98% period-over-period; the revenue of Smart Auto increased by 71% period-over-period.
● In 1H2022, Smart Auto and Smart Life segments’ contribution to revenue increased significantly. Revenue contribution of Smart Life and Smart Auto accounted for 21% and 9% respectively, compared with the full year of 2021, revenue contribution of the two segments was 9% and 4%, respectively.
● Overseas markets contributed 19% of the revenue, increasing by approximately 760 basis points.
● SenseTime continued to lead the industry in its R&D capabilities. R&D expenditure reached RMB2.04 billion. Since 2018, the accumulated investment in R&D has exceeded RMB10 billion. Annualized number of models produced per R&D personnel rose an additional 15%.
● As of June 30, 2022, the Company added 2,136 patents, bringing the total number of patents to 12,502.
● The Company’s financial position remained solid. Net loss was RMB3.21 billion; adjusted net loss was RMB2.56 billion. Total cash reserve held by the Company was RMB19.51 billion.
● According to IDC report, SenseTime ranks first in the market share of computer vision applications in China, a position which it has held for five consecutive years.
Dr. Xu Li, Executive Chairman of the Board and Chief Executive Officer of SenseTime, said, “Even though the first half of 2022 was a challenging period, SenseTime made full use of the comprehensive advantages of its industry-leading AI infrastructure, proactively responding to changes in the macro environment, including the pandemic. We continued to make breakthroughs in many areas. Operations at the newly established Intelligent Automotive Group and Digital World Group developed rapidly, fully releasing the growth potential in Smart Auto and Smart Life segments, which were the driving force of growth in the first half of the year.
Looking forward, digital transformation and intelligent development will push the popularization of AI technology deeper and faster. We are confident we will maintain our long-term competitive advantage in this dynamic industry. SenseTime will continue to adhere to our mission to create a better AI-empowered future through innovation and make AI technology more affordable to all industries and more accessible to people of all walks of life.”
Industry leading AI infrastructure SenseCore to further enhance R&D strength and commercialization
● As of June 30, 2022, SenseTime has launched one of the world's leading AI supercomputing clusters of over 2.5 exaFLOPS, and the cumulative number of commercial models increased by 40% to 49,000.
● Shanghai Lingang AIDC officially launched on January 24, 2022, with 1.745 exaFLOPS of computing power. With our breakthrough in technology and improvement in chip performance, its capacity is expected to reach 5 exaFLOPS, or 33% higher than originally planned. Five types of domestic-made chips have achieved training adaptation on SenseCore, accounting for 15% of Shanghai Lingang AIDC’s active computing power scale.
● The launch of Shanghai Lingang AIDC has elevated SenseCore’s capabilities to a new level, driving our AI model production to continue expanding in terms of scale, accuracy, and speed. Our super-large base model achieves over 90% accuracy in ImageNet large-scale recognition tasks, and ranks among the top three in the world. Our decision-making intelligent model in StarCraft 2 took only five weeks of training time to complete around 100 million rounds of game in StarCraft 2, reaching the highest human ranking of competitive skills. Our self-developed natural language processing and speech recognition technology has achieved industry-leading technical evaluation results.
● AIDC-supported AI-as-a-Service has taken a step forward to commercialization. As of August 2022, our AIDC has opened up 1 exaFLOPS capacity for customers. As the largest commercial AI supercomputing center in East China, Shanghai Lingang AIDC was awarded the title of “Key Regional Comprehensive Artificial Intelligence Infrastructure Demonstration Project” by the National Development and Reform Commission.
Smart Auto and Smart Life growth accelerates, overseas markets continue to expand
● Smart Auto accelerates commercialization: In the first half of 2022, revenue from Smart Auto segment recorded a period-over-period increase of 71%. Smart Auto segment served 20 customers during the period, an increase of 54% period-over-period, revenue per customer also increased by 11%. New products including the “SenseAuto Automatic Parking Assistance System”, “Autonomous Driving Street Sweeping Vehicle”, autonomous shuttle minibus vehicle-2 – city network system, etc, were launched in the first half of 2022. Our smart cabin products were delivered in mass production to many partners, including SAIC, GAC, Dongfeng, BYD, Nio, Chery, etc, maintaining our industry-leading market share. In 1H2022, SenseAuto received confirmation letter for mass production of 3 million new vehicles.
We entered into cooperation with the Alfa Romeo F1 team ORLEN to explore the AI application in motorsports. For data security and privacy protection, the “Technical Requirements and Methods for Automobile Transmission Video and Image Desensitization” jointly developed by China Association of Automobile Manufacturers, SenseAuto and Shanghai Motor Vehicle Inspection Certification Tech Innovation Center was officially released, setting the security standards for data captured by automobile in China and accelerating autonomous driving industry as a whole.
● Smart Life achieves strategic upgrade and expansion: In the first half of 2022, revenue from Smart Life achieved an increase of 98% period-over-period. Smart Life segment served 183 customers during the period, an increase of 18% period-over-period, revenue per customer increased by 67%. As of June 30, 2022, a total of 1.7 billion mobile phones of 180 mobile phone models were pre-installed with SenseTime’s algorithms, covering most top-notch mobile phone manufacturers. We further promoted joint research and development with the world’s leading image sensor manufacturers, and completed and delivered 5 AI sensors with superior functions.
The SenseMARS platform empowered the 2022 Beijing Winter Olympics, covering 10 million square meters of physical space, and was widely deployed in more than 120 scenes including theme parks, malls, museums, airports, etc. SenseMARS has driven more than 200 APPs such as Xiaohongshu, Weibo, bilibili, ZEPETO and Line, and cooperated with top IPs such as Dunhuang Museum, Xu Beihong art gallery, etc, to generate and launch nearly 15,000 pieces of limited-edition digital collectibles, which were sold out immediately.
In regards to Smart Health, our SenseCare platform now covers liver CT and MR analysis, liver, lung, heart and capillaries smart surgery planning etc which includes 18 AI modules covering 6 clinical disciplines such as circulatory, abdomen, chest etc. We have received China’s NMPA Type 3 and Type 2 medical machinery license, EU CE Certified, along with certification in Singapore, Saudi Arabia, covering 16 licenses. We are currently serving 75 hospitals and have served over 1 million people.
SenseTime has also achieved breakthroughs in AI consumer products for households. In August 2022, the SenseTime AI Chinese chess robot “SenseRobot” was officially released. The “SenseRobot” integrates AI perception intelligence, robotic arms and AI decision intelligence. It also has realized production cost control of consumer products as well as safety assurance of household products. With chess and card games as the primary applications, the “SenseRobot” has created a new category of intelligent and safe home robots, further bringing AI to everyday life.
● Smart Business sees robust growth in digital energy management: Despite the temporary impact of the pandemic, the Company sees unwavering demand for digital transformation and smart management for customers going forward.
We have benefited from China’s “dual-carbon” policy and gained an industry leading position by offering our technology to the industry’s premier player in lithium battery makers and to State Grid, with a total contract value exceeding RMB1 billion. Our technology is being applied in significant verticals, for example, in the subway scenario, we have implemented digital security checks and contactless access in 640 stations on over 30 subway lines across China. We have realized contactless access in subways across the mega city with a population of up to over 20 million people. In the consumer household smart door lock market, 90% of smart door lock mainstream brands, including Dessmann, Kaadas, Philips, Panasonic, Bosch, TCL, etc., are embedded with SenseTime’s module, and the cumulative shipments are nearly 1 million units, which is the only one on the market that has passed the certification of the Ministry of Public Security’s Safety and Police Electronic Product Quality Inspection Center, as well as the first solution that has passed the testing and certification of China Bank Card Inspection Center.
● Smart City expands market penetration during pandemic: As the pandemic outbreak is accelerating the development of global city digitization, SenseFoundry is gaining stronger market penetration. As of June 30, 2022, the number of IoT devices connected and empowered by SenseFoundry increased to over 1.5 million, up by 26% in six months. The number of AI models for SenseFoundry increased to 29,000, up by 28% in six months. Among the 155 cities that have deployed SenseFoundry, 16 were mega cities with population over 10 million, and 4 were overseas cities. Our computer vision software for smart cities in China maintains the leading market position with the largest market share. It also ranks first in market share in China’s smart emergency AI and big data sub-markets.
SenseTime fully integrates enterprise social responsibility into our R&D, business and management, and actively promotes the sustainable development of the AI industry. In February 2022, we released our first social responsibility report, committed to the development of human centric AI and applying technology for social good.
Cutting-edge technology exploration and research is an important cornerstone for our society going forward. AI technology based on strong computing power will help explore the frontier of science and technology. SenseTime actively established open-source cooperative relations with many research institutions and industry players to enhance popularity of AI technology, which lowered the entry threshold of AI for small and medium enterprises. As of June 30,2022, SenseTime’s open-source platform obtained more than 60,000 stars on GitHub, making it one of the most popular open-source platforms in the industry.
From March to May, when the pandemic was hitting Shanghai at its worst, we donated pandemic presentation kits and living necessities to the needed, including selected streets, schools and institutions, and organized employee volunteers to participate in community service work. We also launched and donated the SenseThunder-Air “All-in-One” epidemic prevention smart system to temporary medical facilities as well as other public places; leveraged SenseAuto self-driving shuttle minibus and self-driving taxi to support the transportation for anti-pandemic work; used our education platform to provide remote online teaching support to some primary and secondary schools in Shanghai; and provided our SenseCare diagnostic imaging platform to improve the efficiency of imaging diagnosis for doctors working from home.
In March 2022, we delivered our AI-powered Intelligent Nursing System developed for ALS (Amyotrophic Lateral Sclerosis) patient, bringing warmth to the patients and their family.
As a leading AI company, SenseTime is fully committed to data security and privacy protection, and strives to follow the highest standards of practices. In May 2022, the Company received the BS10012:2017 Certification for Personal Information Management Systems (PIMS) from the British Standards Institution (BSI), after consecutively receiving three authoritative certifications from ISO/IEC, reaffirming SenseTime’s firm commitment and practice in personal information security and privacy protection management.
Looking ahead, despite the challenging domestic and international environment, digital transformation and intelligent development will remain the key drivers of China’s economic and social development plan as stipulated in the 14th Five-Year Plan period, and the popularization of AI technologies will continue to bring profound changes to all aspects of daily life. We are confident that we can maintain and widen our competitive edge. In the second half of 2022, the Smart Life and Smart Auto segments will accelerate to realize their potential, while we also continue to lead the AI computing market and develop more incremental markets. We will continue to strengthen our comprehensive edges and adhere to our following established strategies to drive growth and value enhancement:
1. Smart City - maintain the market leading position, further expedite commercialization and penetration.
2. Smart Auto – continue building integrated solution and enhancing our ecosystem, continue breakthrough the industry-leading self-driving technology.
3. Smart Life - continue to develop and commercialize AI sensors, AI ISP chips, SenseMARS metaverse engine and consumer-grade home robotics products.
4. AI-as-a-Service – by utilizing and enhancing SenseCore, we play even more important role in domestication of AI software and hardware
5. Human Capital – enhance team building effort, efficient and effective management, continuously optimize operating matrix.
 According to “China Artificial Intelligence Market 2021H2” released by IDC on June 19, 2022