Zhitong Financial APP learned that Yisou Technology Holdings Limited (referred to as "Yisou Technology") submitted a listing application to the main board of the Hong Kong Stock Exchange for the second time, with Bank of China International as its exclusive sponsor, according to the disclosure by the Hong Kong Stock Exchange on September 29. It is reported that the company submitted its first listing application to the Hong Kong Stock Exchange on February 27, 2023.

According to the prospectus, Yisou Technology is committed to the application of a variety of "data-to-people" scenarios based on artificial intelligence recommendation technology. The company operates four business lines, covering digital reading platform services, digital marketing services, online game distribution services and other digital content services. During the track record period, most of the company's revenue comes from advertising services provided under digital reading platform services and digital marketing services. Specifically, the company's proprietary intelligent recommendation engine should search the recommendation engine to collect, analyze, match or predict the needs and ╱ or preferences of users and customers to meet their different needs equal to the following lines of business:

In terms of digital reading platform servicesAs an independent third-party platform, the company does not produce proprietary digital content, but mainly relies on digital reading by third-party content providers to recommend appropriate literary resources to users. The company predicts users' preferences, adjusts recommendation strategies and recommends literary content that meets users' personalized needs. In addition, the company places advertisers' advertisements on proprietary platforms by collecting, analyzing and predicting users' preferences for advertising content. The company has two types of customers under the business line, namely, users and advertisers. Under the paid digital reading service, customers do not generate advertising revenue for users who purchase paid services (including paid reading resources and subscriptions to advanced member services). In the case of digital reading services that include advertisements, customers are advertisers who place advertisements to users who use free reading resources.

In terms of digital marketing servicesThe company collects, analyzes and predicts users' preferences for advertising content, and matches the needs of advertisers in order to achieve advertising delivery in suitable third-party advertising channels. Offline in this business line, customers are usually advertisers

Online game distribution serviceThe company identifies online games with commercial value and market performance that meet the screening criteria, and publishes and recommends these games to appropriate users on proprietary platforms and external channels based on the company's analysis of users' behavior and their preference for game categories or content. The company's offline customers are the users of the online games issued by the company.

In other digital content servicesThe company recommends telecom operators' value-added services, including digital content such as music and ring back tones, to help them reach target users on proprietary platforms and external channels based on the company's analysis of user behavior, content preferences and willingness to pay. The offline customers of the service line are telecom operators who collect revenue from their users and then share the revenue with the company according to the agreed proportion.

In addition, the company has accumulated a huge user base under the digital reading platform service. The company's appropriate search series Reading App has a cumulative total of 44 million registered users as of May 31, 2023. User activity on the company's platform has increased during the track record period. The average number of monthly active users of Yisou series reading App increased from 21.1 million in 2020 to 23.9 million in 2021, and further increased to 25.6 million in 2022. The number remained relatively stable at 25.6 million for the five months ended May 31, 2023. In 2020, 2021, 2022 and the five months ended May 31, 2023, the average monthly income of each fee-paying household of Yisou series reading App was 35.7 yuan, 45.2 yuan, 54.8 yuan and 46.3 yuan respectively.

It is worth noting that the company has achieved a diversified commercialization model, which mainly includes subscription, pay-per-use, advertising revenue and revenue sharing. Details of the diversified realization models of the company's various business lines are as follows:

Digital reading platform serviceThe company generates revenue mainly through paid reading, including purchasing the company's paid reading resources and subscribing to the company's advanced membership, users who read from the company's paid services, or displaying advertisements related to advertising service reading from the literary resources of the company's advertisers, who are charged by the company on the basis of CPC and CPM.Digital marketing serviceCompanies usually work with advertisers to generate advertising revenue in accordance with relevant framework agreements, and charge them mainly according to CPC benchmark, CPM benchmark and CPA benchmark.Online game distribution serviceCompanies usually charge users for the purchase of virtual props in the game, and then share part of the revenue (i.e. revenue sharing) with third-party game content providers.Other aspects of digital content servicesAfter receiving the settlement of the user's income, the telecom operator cooperating with the company will settle the relevant income (that is, the share of the income) with the company according to the agreed proportion.

Financially, for the five months ended May 31, 2020, 2021, 2022 and 2023, the realized income of Yisou Technology was about 410 million yuan, 433 million yuan, 456 million yuan and 198 million yuan respectively, while the profit for the year was about 31.305 million yuan, 50.011 million yuan, 44.448 million yuan and-14.781 million yuan, respectively.

In addition, according to the prospectus, some of the main risks faced by the company include the following aspects: if the company's appropriate search recommendation engine fails to properly analyze and predict the behavior and preferences of users, or to keep up with technological changes, the company's business, operating results, financial position and prospects may be significantly adversely affected. The specific application scenarios of the company's appropriate search recommendation engine belong to independent industries, and the development of these industries may make the company's business face risks, which makes it difficult to evaluate the company's business and prospects. The company does not produce proprietary digital content, but mainly relies on third-party content providers of digital reading, online games and other digital content to recommend to users and customers.

In addition, the company's digital reading platform services accounted for a large portion of the company's revenue during the track record period. If the company fails to retain users, or if user participation no longer increases or decreases, this may have a significant adverse impact on the company's business, financial position, operating results and prospects. On the other hand, a large portion of the company's revenue comes from digital marketing services. If the company fails to attract new advertisers, retain existing advertisers or maintain their demand for the company's services, the company's business, results of operations and financial position may be significantly adversely affected.