A Bright Future for Enterprise Desktop IT Services

BEIJING, August 17, 2022 /PRNewswire/ — In July, Edianyun entersa red exclusive strategic partnership with seewin service, a subsidiary of CVTE (stock code: 002841), a world-renowned provider of intelligent interactive solutions focused on display and control technology. The “Intelligent Conference Room” product, which can help create a complete set of closed-loop conference scenario solutions, was also officially launched in Edianyun’s online shopping mall.

After keeping a low profile for years, desktop IT has grown in importance.

In February, Edianyun, a leading provider of technology-based desktop computing services in China, submitted a prospectus to HKEX and applied for listing on the main board. According to the prospectus, Edianyun plans to invest in expanding the market, improving services, researching and diversifying products, refurbishing capabilities and improving operation efficiency.

Edianyun engages in technology-based desktop IT services that cover IT infrastructure and manage IT services. It also develops SaaS products to meet customers’ digital demands.

Exceptional customer retention rate and positive adjusted net income

Edianyun’s revenue comes from three business pillars: fee-based desktop computing services, device sales, SaaS and other services. Paid desktop IT services are the most essential and account for around 80% of total revenue. For the first nine months of 2021, this line of business accounted for 85.4% of total revenue.

As for gross revenue, Edianyun has maintained a rapid growth trend in recent years. The prospectus shows that revenues for the first nine months of 2019, 2020 and 2021 reached 632 million RMB, 813 million RMBand 838 million RMB, respectively. In other words, the turnover of the first three quarters of 2021 exceeded that of the whole year of 2020.

Edianyun’s revenue grew 28.6% from 2019 to 2020 and 44.8% from the three quarters of 2020 to 2021, indicating that the COVID-19 pandemic has not hampered Edianyun’s progress .

Meanwhile, the number of active customers and devices in service is increasing dramatically. By September 30, 2021the relevant figures rose to 37,000 1.091 million, up 67.34% and 84.9% from the end of 2019.

For the 12 months ending in September 2021, Edianyun’s net dollar retention rate reached 124.2%, registering a year-on-year growth of 9.6 percentage points. Net dollar retention rate is a widely used metric in the subscription model, which refers to the increased magnitude of revenue from retained customers over the period. The higher the retention rate, the higher the customer loyalty and retention.

In the first three quarters of 2021, Edianyun’s adjusted net profit reached 74.9 million RMB — turn losses into profits.

Edianyun has occupied first-mover advantages in the broader desktop IT services market.

Business desktop computing services refer to services provided to businesses and employees to meet the computing demand generated by business operations, including expenses related to office software and hardware.

According to Frost & Sullivan, the size of the enterprise desktop IT services market in China developed from 136.4 billion RMB in 2016 at 150 billion RMB in 2020 and is expected to reach 200 billion RMB in 2025.

Based on service delivery modes, enterprise desktop computing services can be divided into direct repurchase mode and usage-based mode. The direct purchase mode refers to the direct purchase of IT infrastructure and permanent software licenses from PC brand owners, software publishers and distributors. The usage-based mode is a more flexible mode of service than the direct redemption mode. It aims to meet the needs of on-demand business operations through a pricing mechanism based on actual usage of computing resources.

Currently, the usage-based office computing market in China has a penetration rate of only 2.1% in terms of number of devices, significantly lower than the 60.0% in the US market in 2020. The market size of the desktop computing industry based on the use should reach 29.2 billion RMB in 2025, representing enormous growth potential.

According to studies conducted by Frost & Sullivan, Edianyun has been recognized as the first and largest technology-based desktop IT service provider in China in terms of income, numberst of devices in service and refurbishment capability. In terms of revenue, Edianyun held a 14.9% market share in 2020, ranking first in the desktop computing service industry in usage-based mode.

Since 2020, Edianyun has the only remanufacturing plant in China with a computer remanufacturing capacity of more than 500,000 workstations. By taking advantage of advanced refurbishing technology, Edianyun extends the average service life of devices from three to seven or even ten years, which improves usage efficiency.

With the self-developed Nebula system, Edianyun provides services such as device configuration, device deployment/engineering, support, optimization, and lifecycle management services. This system enables Edianyun to manage devices and improve operation efficiency effectively and massively.

If we apply At Warren Buffett’s famous snowball analogy to understand this background, the ever-growing desktop computer market would be the “long hill” on which Edianyun relies, and Edianyun’s unique technological assets, such as the remanufacturing factory and the system Nebula, would be the “wet snow”. With the two most important things identified, “long hill” and “wet snow”, Edianyun can surely enlarge its “snowballs” and usher in the bright future of enterprise desktop computing.

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