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Sogou IPO roadshow PPT exposure: playing AI licensing Sohu has control

via:搜狐IT     time:2017/11/2 20:02:16     readed:1629

Sogou has become the fourth largest Internet company, the two major products for the Sogou input method (the largest Chinese input method) and Sogou search (China's second largest search engine), and are in the stage of rapid development.

PPT has repeatedly stressed Sogou and single largest shareholderTencentOf cooperation, including Sogou and QQ browser, WeChat cooperation. Ownership structure, the PPT shows the listing of Sohu shares 37.8%, Zhang Chaoyang holding 9.2%, Tencent holding 43.7%, CEO Wang Xiaochuan shares 5.5%, Sohu and Sogou employees 3.8% stake. But according to Sohu, Tencent and Sogou's voting rights agreement, this agreement will be completed after the IPO in the Sogou, Sohu still has the right to appoint more than half of the directors in the Sogou board.

In addition, PPT also highlighted the AI ​​concept, in the previous prospectus AI was mentioned more than 90 times, from technology to product landing, from strategy to future development planning are involved.

[IPO]

Sogou (SOGO) IPO issue scale 4500 million ADS, IPO issue price 11-13 US dollars / ADS, 1 share ADS is equal to 1 shares of common stock

Stock code: SOGO in New YorkSecuritiesExchange (NYSE) listed

To raise funds: R & D investment; sales and marketing; potential strategic acquisitions, investment and cooperation opportunities.

Lead underwriter: J. P. Morgan, Credit Suisse, Goldman Sachs, CICC

【Company Overview】

【corporate vision】

"Let communication and access to information become simple"

Two major products: Sogou input method, Sogou search

【Growth process and ownership structure】

- In 2004, Sogou was established;

- 2006, launched Sogou input method;

- 2008, launched Sogou browser;

- 2010, divested from Sohu;

- In 2013, Tencent investment, and Tencent's search business "Soso" merger.

According to Ereli 2019 September MAU data, the current Sogou has become the fourth largest Internet company, the second largest search engine, the first big Chinese input method.

IPO before the ownership structure: Sohu holding 37.8%, Zhang Chaoyang holding 9.2%, Tencent holding 43.7%, CEO Wang Xiaochuan holding 5.5%, Sohu and Sogou employees 3.8% stake.

Sogou became the second largest domestic search engine, and market share continued to rise

- from 15.2% in March 2017 to 17.8% in September (by mobile search request).

- The annual growth rate of mobile traffic reaches 72% (by searching PV).

- Over the past three years, the search business's revenue compound annual growth rate of 34%, is the fastest growing mainstream search engine.

Sogou input method is the largest Chinese input method

- According to Ereli provided in September 2017 average DAU data, mobile DAU reached 303 million, is China's third largest mobile phone applications, second only to WeChat and QQ.

- The penetration rate on the PC side is as high as 98%.

- the average daily through the Sogou input method to express the Chinese characters more than 90 billion.

- Sogou input method almost all Chinese mobile applications have interaction.

【Sogou】

Sogou: Innovation in the field of search for China's Internet industry leader

ChinaSearch engine market sizeIn placeRapid growthThe stage

- It is expected that the compound annual growth rate of the search market will be 21.7% from 2016 to 2021.

- More and more advertisers will transfer ads to online, 2016 online advertising accounted for 44.7% of all advertising, 2021 is expected to rise to 75.3%.

- Demand for search advertising in vertical areas such as education, electricity, business, financial services, and medical services continues to grow at a high speed.

- Compared to the United States, China's online search market, although many users, but the permeability is still low, the future there is still great growth potential.

- 2016, the average per search users to bring the annual search advertising revenue, the United States is China's 8 times.

Sogou's competitive advantage allows it to redefine the search

Tencent ecosystem to bring the difference between the search content

- A diversified flow access path

Large data and AI brought cutting-edge technology

Through the strategic cooperation to obtain differentiated search content

- Sogou WeChat search is the only common search engine WeChat, you can retrieve the WeChat on more than 2000 million public number of all content.

Seeking reliable, formal medical information content.

- Sogou has a strategic investment in the Q & A community and has become an exclusive partner in the search field. Sogou search users can get the question and answer content of the exclusive real-time push.

- Sogou English search, is the world's first cross-language search engine, andMicrosoftBing search cooperation, designed to help the Chinese who are not proficient in English, search and read the world of medical, technology, human information.

Diversified and differentiated traffic access channels

- traffic mainly from: Sogou search App itself, China's largest mobile browser - QQ browser, super App - Sogou input method and WeChat, and with the mainstream mobile phone manufacturers to establish relations of cooperation.

- the current flow of the main channels accounted for: the original flow accounted for 21%, from Tencent accounted for 36%, from mobile phone manufacturers accounted for 43% (vivo, OPPO, millet, etc.)

Sogou input method for Sogou search flow four ways

Micro letter for Sogou search guide flow in three ways

Together with Tencent to build and share the ecosystem, from the ecosystem to obtain the search traffic, access to differentiated search content, but also for the ecosystem and Tencent to provide services, contribute value.

Sogou input method to obtain massive data, and then use the advanced data capabilities to enhance Sogou search

- will be their leading AI technology successfully integrated into the search dog search and Sogou input method, to enhance the product force.

- AI-related technical strength, Sogou has industry-leading voice recognition accuracy (97%), machine translation and natural language understanding technology.

- Sogou's AI technology can also be applied to the field of things, is conducive to its virtual personal assistant (VPA) development.

Sogou also hope that through the development of search, integration of large data, AI technology, access to more and more development opportunities, such as news push, virtual personal assistant.

[Visionary management team and technology-driven culture]

- The management team is talented and working for the company for a long time.

- Innovative engineer culture: 43% of the staff is a master or doctorate, 71% of the staff engaged in research and development work, applied for 714 patents, and Tsinghua University, the establishment of the AI ​​research institutions - Heavenly Institute.

【Financial status】

Set size, growth, profitability in one

- scale

Sogou search mobile side MAU reached 511 million; Sogou input method mobile side MAU is 427 million; 2016 to achieve revenue of $ 660 million;

- Growth

From September 2014 to September 2017, the annual growth rate of mobile traffic was 72%. In September 2017, the Sogou input method moved DAU, which grew 55% year on year. From 2014 to 2016, An average annual growth rate of 36%;

- Profitability

Not in accordance with the US GAAP (Non-GAAP), the company has achieved profit for 15 consecutive quarters; 2016 to achieve Non-GAAP net profit of 97 million US dollars.

Clearly mature revenue model

- Search and search related advertising revenue accounted for 92.4% of total revenue, which, based on PPC paid pay services accounted for 70.2% of total revenue, other online advertising services accounted for 20.2%.

- Game, Sogou reading, intelligent hardware "Sugar Cat" (child intercom positioning watch) and other income accounted for 9.6% of total revenue.

Industry-leading revenue growth

Stable cost structure and continuous improvement of operating leverage

The main business costs accounted for the proportion of stability; the first three quarters of 2017, operating costs year on year, the chain has improved, continuous record low during the reporting period, the third quarter of 2017 down to 35%.

Considerable profitability and healthy operating cash flow

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