Xuan Wu Cloud Announces 2022 Annual Results

Continued to focus on SaaS strategy

Revenue from AI related products and services achieved rapid revenue growth

• Revenue increased by 5.2% to RMB1,043.4 million, including PaaS and SaaS services
• During the reporting period, the Group continued to consolidate the scale of its top clients'coverage, including 16 of top 100 software companies, 24 of top 100 Internet companies, 36 of top 100 regulated security companies, 44 of top 100 banking companies, 14 of top 100 Chinese liquor companies, 22 of top 100 commodity companies, 32 of top 100 beverage companies and 34 of top 100 food companies
• Based on the flexible and diverse product matrix, the Group actively sought the adaption to and certification of mainstream ITAI products, and reached cooperation with cloud vendors such as Huawei Cloud and JD Cloud. Consequently, the revenue from Group's CRM SaaS Marketing Cloud ICC (integrated communication center) product-related services grew by 298.1% compared with last year
• Revenue from the Group's self-developed AI products and services grew rapidly by 73.8% over the same period last year. The Group's AI laboratory has certain competitive strengths backed by underlying technologies such as big data and multimodal detection
• Thanks to the leading AI and aPaaS capabilities, the Group's CRM SaaS Sales Cloud can quickly respond to changes in customer needs and continuously improve customer operations, resulting in a core customer retention rate of 91.7% for the Group's CRM SaaS service
• The Group's CRM SaaS Service Cloud adhere to the path of providing intelligence-based service, by rolling out a matrix of intelligent products such as call center, intelligent quality inspection and AI robot

GUANGZHOU, China, March 29, 2023 /PRNewswire/ -- Xuan Wu Cloud Technology Holdings Limited ("Xuan Wu Cloud" or the "Company", together with its subsidiaries, the "Group"; stock code: 2392.HK), a leading local intelligent CRM services provider in China, today announced its annual results for the year ended 31 December 2022, with the Group recording solid revenue growth.

During the reporting period, the Group recorded revenue of RMB1,043.4 million, representing an increase of 5.2% compared with the corresponding period in 2021. The Group continued to focus on SaaS service, with the SaaS business recording revenue of RMB474.2 million, representing a revenue growth of 8.4% and accounting for 45.4% of the Group's revenue.

Mr. Chen Yong Hui, Chairman of the Board from Xuan Wu Cloud, said that despite the tough external environment in 2022, we continued our intelligent CRM development strategy driven by both technology and business to cope with complex market changes. This brought us to a new level in terms of technology and product development, business ecosystem creation and capital operation. During the period under review, we maintained steady growth in business operations and stable level of cash and cash equivalents, which enabled our business growth in a healthy and orderly manner during the pandemic period. Our cash position stayed at RMB161.0 million for the year ended 31 December 2022, with a 82.3% growth compared with the same period in 2021.

During the reporting period, the Group continued to invest in research and development and services to expand its independent research and development capabilities, and empowered the digital intelligence transformation of our clients based on the multi-touch, all-channel and entire business cycle strategic system. Xuan Wu Cloud enables customers to achieve cost reduction and efficiency improvement throughout the sales lifecycle, and continues to consolidate its market share advantage in FMCG, finance, government-related, and TMT industries. During the reporting period, Xuan Wu Cloud has covered 16 of top 100 software companies, 24 of top 100 Internet companies, 36 of top 100 regulated securities companies, 44 of top 100 banking companies, 14 of top 100 Chinese liquor companies, 22 of top 100 daily necessities companies, 32 of top 100 beverage companies, and 34 of top 100 food companies.

Strategic focus on CRM SaaS services with three cloud services delivering productive results

During the reporting period, Xuan Wu Cloud continued to increase its investments in the intelligent CRM service industry and focused on our three cloud services in SaaS business segment, including Marketing Cloud, Sales Cloud and Service Cloud. The Group's CRM SaaS services integrate the traditional CRM functions with cloud communication, artificial intelligence and data intelligence capabilities to provide customers with one-stop smart CRM services across the entire business cycle from front-end marketing to after-sales services.

For Marketing Cloud, as of 31 December 2022, it recorded revenue of RMB390.7 million, accounting for 82.4% of the overall revenue in SaaS services. Among them, revenue generated from ICC related services for the year ended 31 December 2022 increased by 298.1% as compared with previous year. At the same time, the Group actively sought the adaptation to and certification of mainstream ITAI products and reached cooperation with cloud vendors such as Huawei Cloud and JD Cloud, with an aim to respond to national strategies and drive the expansion of the industry.

In terms of Sales Cloud, the Group leveraged its leading self-developed AI and aPaaS capabilities, and with more than a decade of experience in the FMCG industry, it can quickly respond to changes in clients'demands and constantly enhance their operations, allowing them to reduce costs and improve efficiency, and empowering our clients to achieve business growth. As a result, our core clients'retention rate reached 91.7%. In addition, in terms of Artificial Intelligence and Internet of Things ("AIoT"), we have gradually launched smart box, intelligent fridge, air curtain cabinets and other key products to deepen the link between enterprises and end consumers and ultimately increase the sales volume of terminals.

In the area of Service Cloud, the Group adheres to provide intelligence-based Service Cloud services, by rolling out a matrix of intelligent services continuously such as Call Center, Intelligent Quality Inspection and AI robot. Meanwhile, our AI robot service has further enhanced business capabilities for our clients in various industries such as the financial, TMT and Government-related industries.

Mr. Chen Yong Hui expressed that our three cloud services relied on the platform's technology base to continuously optimize product portfolio and business model. At the same time, we expanded our products and services portfolio, and launched AIoT products, such as intelligent fridge, to improve terminal sales of FMCG enterprises, thereby creating value for clients and achieving "win-win"situation.

CRM PaaS continues to innovate and AI platform empowers to unveil a whole new space

Xuan Wu Cloud CRM PaaS services include cPaaS platform, aPaaS platform, and AI and DI capabilities. During the reporting period, the cPaaS platform completed the upgrade and transformation of cloud-native architecture, so as to provide our clients with more efficient and higher quality of communication capabilities. In terms of aPaaS platform, it achieved research and development breakthrough in improving the efficiency and quality of product delivery.

In addition, the AI platform is a self-developed platform based on cloud computing native technology with focus on image recognition, and its algorithms is considered top-tier level in the FMCG industry. In 2022, the Group solidified and completed innovative technologies in FMCG industry, including 3D depth estimation and application scenarios analysis and other AI technology capabilities, to further enhance the commercial capability of AIoT and continuous innovation of DI capabilities. The high recognition accuracy rate of AI products enabled us to attract new clients as well as retain our existing clients, thus resulting in a rapid growth of 73.8% of our revenue generated from AI related products and services.

At the same time, Mr. Chen Yong Hui pointed out that we also continued to strengthen our aPaaS platform and DI capabilities. In terms of aPaaS platform, technological breakthroughs in cloud native deployment were achieved in 2022 enabling the deployment of hybrid cloud in our services, which also gained recognition from our clients. In addition, we leveraged our DI capabilities to assist clients in store expansion such as avoiding the establishment of duplicated stores in the same location and establishing a system of tags for FMCG industry, which helped us to deepen our understanding of FMCG industry effectively and helped enterprise clients to achieve better intelligent decision-making.

2023 Outlook: continuous R&D innovation and high quality service to drive business growth

Regarding the Group's development plan for 2023, Mr. Chen Yong Hui expresses that with the support of industrial policy relating to digital economy and the development of domestically adaptive software, the Group will unswervingly consolidate research and development strengths and enhance competitiveness in intelligent CRM service. The Group has also been actively increasing investment in research and development and talent training in order to continuously provide clients with high-quality services, while constantly deepening the ecological cooperation.

In light of product technology and R&D innovation, the Group will invest in research and development in a holistic and continuous manner. In particular, in the field of AI technology, the Group will continue to deepen image recognition analysis and iteration of depth estimation models, strengthen the application of image and video recognition algorithms, further enhance smart store expansion scenarios, and provide more AI application scenarios for intelligent CRM services.

Mr. Chen Yong Hui says that we have already developed industrial competitiveness in the field of AI technology. In the future, by leveraging the leading Generative Pre-trained Transformer ("GPT") technology in the industry, we will further innovate in the application scenarios through the integration of AI pre-trained model and CRM intelligent services so as to achieve cost reduction, efficiency enhancement and performance growth for our clients with digital and intelligent solutions.

At the same time, the Group will improve the overall competitiveness of Marketing Cloud, Sales Cloud and Service Cloud. In Marketing Cloud, the Group will integrate ICC module and Call Centre to promote diversified integration of software services, communication resources and marketing services. In terms of Sales Cloud, the Group will continue to consolidate existing shares in the FMCG market and optimize the service portfolio to gradually expand into the consumer durables industry. In addition, in terms of AIoT, the Group will assist clients to optimize their business strategy and increase the market presence of intelligent fridge, as a mean to improve the market share of Sales Cloud, and thereby continue to develop more industry leading clients in the FMCG industry, while simultaneously launching more new products and services.

In Service Cloud, our intelligent customer service products will use our AI capabilities to simplify the formulation of complex business scenarios, and rapidly improve the efficiency of multiple rounds of dialogue application scenarios between our clients and their users.

The sustainable corporate development can't be achieved without the talent cultivation. In 2023, the Group developed a set of standardized systems for research by industry think-tanks and assembled a team of high-calibre industry research talents. At the same time, the Group will continue to embrace the opportunity with cloud vendor ecosystem and develop new eco-capabilities of Xuan Wu Cloud.

Mr. Chen Yong Hui says, "We believe the long-term trend of digitalisation and intelligence in enterprises will remain unchanged. With the support from AI and DI capabilities and other technologies, the bonding between our services and clients will be strengthened. Externally, we are committed to expanding our market layout, taking clients and channel partners as part of our efforts to go global. At the same time, we will actively join hands with cloud vendors to further deepen ecological cooperation. Internally, we will continue to promote innovative research and development and gain insight into the latest industry dynamics by leveraging our research and development team and the industry research institute; intensify and solidify our business operations throughout the industry-wide value chain to develop star products; insist on providing high quality products and services to our clients; and strive to create value for our clients.

About Xuan Wu Cloud:

Xuan Wu Cloud Technology Holdings Limited, the largest local intelligent CRM service provider in China(stock code 2392.HK), which was successfully listed on the Main Board of The Stock Exchange of Hong Kong Limited on 8 July, 2022. The company's domestic operating entity is Xuan Wu Technology, which has established a marketing service system covering 34 provinces and cities across China. Xuan Wu Cloud has aPaaS, cPaaS, AI, and DI platform as technical base, with Marketing Cloud, Sales Cloud, Service Cloud as core SaaS product applications, aiming to provide customers with multi-touch, all-channel, entire business cycle management of intelligent CRM products and services.