NobleCan AI Technology (Chengdu) Co., Ltd. (hereinafter referred to as "NobleCan") submitted its prospectus to the Hong Kong Stock Exchange on November 12, 2024, aiming to list on the main board, with CICC as the sponsor.

Three Main Business Lines Lay the Foundation

Overall, NobleCan focuses on advanced technologies such as artificial intelligence and digital twins, including the three major industrial applications of AI+ transportation, AI+ energy, and AI+ urban governance.

Specifically:

1. AI+ Transportation, including AI+ rail transportation, AI+ urban transportation, and AI+ airports – As of November 8, 2024, NobleCan has provided solutions for identifying defects in catenary suspension status to over 80% of China's railway bureaus. Since the launch of these solutions in 2019, they have been applied to approximately 370,000 kilometers of railway tracks, detecting over 200,000 defects. Besides AI+ rail transportation, as of November 8, 2024, NobleCan's AI+ urban transportation and AI+ airports are also in the commercial trial operation phase.

2. AI+ Energy, including AI+ power and AI+ chemicals – As of June 30, 2024, NobleCan's AI+ Energy has participated in deploying over 100 distributed energy storage centers for power grid companies, providing intelligent monitoring and data analysis for the operating status of thousands of servers, software and hardware systems, and network devices deployed in these energy storage centers. As of June 30, 2024, NobleCan's AI+ solutions have also assisted customers in conducting intelligent image recognition and data analysis for over 20,000 kilometers of transmission and distribution lines. As of November 8, 2024, in addition to AI+ power, NobleCan has also initiated the commercialization process for its AI+ chemicals business.

3. AI+ Urban Governance, mainly including applications such as parks, smart campuses, emergency response, and community management – In urban governance, NobleCan is committed to providing intelligent, digital, and visual AI+ solutions for a wide range of application scenarios. These AI+ solutions aim to realize intelligent and automated inspection and management of the urban environment.

During the track record period, NobleCan's revenue from AI+ Transportation came entirely from the AI+ Rail Transportation business, while revenue from AI+ Energy came entirely from the AI+ Power business.

Structurally, the company's AI+ Energy business has grown significantly faster in the past three years, accounting for over 60% of revenue as of June 2024.

Specifically, in the field of AI+ Rail Transportation, as of November 8, 2024, NobleCan has provided solutions for identifying defects in catenary suspension status to over 80% of China's railway bureaus, with a cumulative railway application mileage of approximately 370,000 kilometers and over 200,000 defects detected.

In the field of AI+ Energy, as of June 30, 2024, NobleCan's AI+ Energy has participated in deploying over 100 distributed energy storage centers for power grid companies and assisted customers in conducting intelligent image recognition and data analysis for over 20,000 kilometers of transmission and distribution lines.

Financially, from 2021 to 2023 and the first six months of 2024, NobleCan's revenue was approximately RMB 101 million, RMB 253 million, RMB 364 million, and RMB 186 million, respectively. The net profits for the same periods were RMB 25.743 million, RMB 63.161 million, RMB 88.566 million, and RMB 50.736 million, respectively.

Within the AI industry, NobleCan's gross margin levels have been relatively stable over the past three years, at 54.5%, 55.6%, and 58.1%, respectively. The gross margin for the AI+ Transportation business is as high as approximately 90%. However, as the main driver of revenue growth, the AI+ Energy business has a gross margin of only about 40%.

Based on the gross margin calculations of representative domestic AI companies such as SenseTime, the average gross margin of China's AI industry was 37.20% in 2022.

A simple comparison clearly shows the difference.

Strengthening Technology to Consolidate Market Position

The prospectus indicates that NobleCan focuses on the industrial application of technologies such as artificial intelligence and digital twins in areas such as AI+ Transportation, AI+ Energy, and AI+ Urban Governance. It primarily provides software and hardware integrated solutions based on AI industry models.

From 2021 to 2023, NobleCan achieved revenues of RMB 101 million, RMB 253 million, and RMB 364 million, with profits of RMB 26 million, RMB 63 million, and RMB 89 million during the period, respectively.

This is not NobleCan's first attempt at the capital market. In February 2023, the company initiated IPO counseling with plans to list on the STAR Market. However, in the second half of 2024, the company withdrew its counseling registration.

Founded in 2015, NobleCan specializes in applying advanced AI and digital twin technologies to complex open scenarios, deeply integrating and implementing them with application scenarios. Its self-developed intelligent analysis system for catenary suspension status has been included in the National Major Scientific and Technological Innovation Achievements Database and is widely used commercially.

Furthermore, NobleCan has developed the NBK-INTARI AI platform, which integrates query and processing functions to support intelligent monitoring, detection, and operation and maintenance.

With profound expertise in advanced technologies such as digital twins and deep learning, NobleCan helps clients achieve intelligent upgrades in monitoring, detection, and operation and maintenance.

NobleCan has market access qualifications for all 18 railway group companies under the China Railway Corporation and is a top-tier 3A railway material supplier.

Starting with railway transportation maintenance, NobleCan applies AI technology in smart cities and smart grids.

In the field of smart cities, NobleCan has formed deep cooperation with leading smart city general contractors in Sichuan and Zhejiang, among others, and has successful solutions and project cases in areas such as smart environmental monitoring, smart campuses, smart water management, and forest fire prevention, making it a pioneer and leader in this sub-sector.

In the field of smart grids, leveraging its mature experience in intelligent monitoring and detection in railway transportation, NobleCan has launched an all-weather intelligent inspection solution for power transmission and transformation lines, which has been applied to the Tibet Power Grid, where data collection conditions are relatively harsh. The solution automatically identifies abnormalities in conductors, towers, markings, and the surrounding environment from image and infrared data collected by drones, overcoming the challenge of intelligent monitoring of power transmission and transformation lines in harsh weather and natural environments.

Paving the Way for a Positive Market Prospect

Regarding the withdrawal, NobleCan revealed in its prospectus submitted to the Hong Kong Stock Exchange that to further expand its global business and considering that the Hong Kong Stock Exchange can provide an international platform for the company to access foreign capital and attract various foreign investors, the company voluntarily decided to discontinue its previous A-share listing plans and instead seek a listing in Hong Kong.

In terms of revenue in 2023, NobleCan was the second-largest provider of AI+ power supply system inspection and monitoring solutions in China and the seventh-largest provider of AI+ rail transportation inspection and monitoring solutions in China.

Additionally, data from CIC Insight also shows that China's AI+ infrastructure solutions industry is growing steadily, with the market size expanding from RMB 0.6 trillion in 2018 to approximately RMB 1.3 trillion in 2023, representing a compound annual growth rate of 17.2%.

This upward trend is expected to continue, with the market size reaching RMB 2.9 trillion by 2028, representing a compound annual growth rate of 16.6%.

Looking ahead, the journey of AI+ is just beginning, and NobleCan's AI digital systems will be applied in even more fields. As the wave of AI continues to surge, NobleCan may emerge as one of the most outstanding players in the future.

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