Good News on Listing | Frost & Sullivan Assists Tianju Dihé (Suzhou) Technology Co., Ltd. to Successfully List on the Hong Kong Stock Exchange (2479.HK)

Tianju Dihé (Suzhou) Technology Co., Ltd. (hereinafter referred to as 'Tianju Dihé') successfully went public on June 28, 2024, with a global issuance of 4,818,200 shares at an issue price of HK$83.33 per share, raising approximately HK$349 million net from the global offering.

During the Hong Kong listing process, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, investment banks, and other intermediaries in completing relevant parts of the prospectus (such as the overview, competitive advantages and strategy, industry overview, business, and other important sections), helping the issuer communicate with the Hong Kong Stock Exchange and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and providing feedback on various industry-related issues to the Hong Kong Stock Exchange.

The company is a comprehensive API data circulation service provider in China;

The company is one of the earliest service providers in the industry;

The company is an innovator in the industry, possessing strong R&D capabilities and accumulating core technical advantages;

The company has a mature, robust and diversified customer base, a variety of data service providers with stable services, and sustainable monetization capabilities;

The company has an expandable business model;

The company has a creative spirit and an experienced management team.

According to a report by Frost & Sullivan:

The company is a comprehensive API data circulation service provider in China, with a market share of 6.1% based on its revenue for 2022.

The digital economy combines digital technology with the real economy, using digital knowledge and information as key production factors, digital technology as the core driving force, and modern digital networks as important information platforms. During the development of China's digital economy, there have also been the following pain points: (1) Differences in database architecture lead to data silos, where a set of data held by one organization cannot be easily or fully used by other organizations. Data silos hinder the full access and utilization of data assets, thereby hindering the development of the digital economy; (2) Stakeholders are increasingly concerned about data security and privacy, especially data breaches, data abuse, and cross-border data transfers; and (3) Some industry standards in the digital economy need further optimization, such as data rights confirmation and pricing.

In the digital economy, all governments, enterprises, institutions, and individuals can generate data, thus participating as data providers. Data circulation and management service providers collect, clean, process, analyze, and share data through APIs and other technologies (such as big data technology and blockchain technology) to unlock the economic value of data and provide it to other participants. An API is a set of rules and protocols that allow data exchange between systems, acting as an intermediary between them.

China's digital economy grew steadily with an annual compound growth rate of 12.5% from 2018 to 2022. In 2022, the scale of China's digital economy reached 50.2 trillion yuan, accounting for about 41.5% of GDP, while in 2018 it accounted for about 34.0%. China's digital economy is expected to reach 82.0 trillion yuan by 2027, with an annual compound growth rate of 10.3% from 2022 to 2027, accounting for about 49.6% of China's expected GDP in 2027.

API services utilize API technology to provide standardized services between different institutions, including: (i) API data circulation services; (ii) API SMS services; and (iii) API recharge services. The API service market grew from RMB 176 billion in 2018 to RMB 379 billion in 2022, with an annual compound growth rate of 21.2%. API SMS services remained the largest sub-market in 2022, with a market size of RMB 285 billion. API data circulation services were the second-largest sub-market in 2022, reaching RMB 69 billion. The market size of API recharge services reached RMB 25 billion in 2022. It is estimated that by 2027, the API service market will reach RMB 689 billion, with an annual compound growth rate of 12.7% from 2022 to 2027. Among them, the API data circulation service segment is expected to reach RMB 259 billion by 2027.

API China's API data circulation service market participants are divided into two categories: comprehensive API data circulation service providers and industry-specific API data circulation service providers. Comprehensive API data circulation service providers offer comprehensive API data circulation services (such as 'three-factor' verification, transportation, weather, etc.) along with a wide range of data sources and supply. Industry-specific API data circulation service providers focus on providing API data circulation services for specific types of data (such as enterprise registration information).

The API data circulation service market grew from RMB 3.3 billion in 2018 to RMB 6.9 billion in 2022, with an annual compound growth rate of 20.6%. Among them, the scale of comprehensive API data circulation services reached RMB 2.37 billion in 2022, with a compound annual growth rate of 33.2% from 2018 to 2022. In 2022, the market scale of industry-specific API data circulation services reached RMB 4.57 billion. By 2027, the API data circulation service market is expected to reach RMB 259 billion, with an annual compound growth rate of 30.2% from 2022 to 2027. Among them, comprehensive API data circulation services are expected to reach RMB 9.3 billion in 2027, with a compound annual growth rate of 31.5% from 2022 to 2027. The rapid growth of the market reflects the strong demand for API data services from governments and corporate institutions as they continue their digital transformation to improve cost control and optimize efficiency.

Comprehensive API data circulation service providers are important participants in the API data circulation service market, offering comprehensive services for customers across different industries in a wide range of scenarios. In 2022, measured by revenue, aggregated data accounted for 6.1% of the comprehensive API data circulation service market in China. In the same year, measured by revenue, aggregated data accounted for 2.1% of the overall API data circulation service market. Comprehensive API data circulation service providers enjoy competitive advantages over other providers due to their rich and diverse data sources and services for multiple different industries.

Data management solutions refer to comprehensive solutions that assist governments and enterprises in collecting, cleaning, and analyzing data accumulated throughout the entire data lifecycle, transforming data assets into forms that can be easily used by different business departments. Data management solutions include software for managing data assets as well as services provided to end-users by data management solution providers, including implementation, consulting, and maintenance. Generally speaking, data management solutions include the following three key steps: (1) Data collection and integration, which refers to the process of extracting data from external and internal sources using API technology and collecting and integrating multi-source heterogeneous data on a centralized platform; (2) Data cleaning and processing, which involves removing duplicate or invalid data, then converting it into a unified standardized format that is easier to handle and analyze, and repairing damaged data to ensure higher analytical accuracy; and (3) Data analysis and visualization, which refers to the process of identifying patterns and providing analysis of large amounts of data through visual presentation.

The Chinese data management solutions market (including software and service revenue) grew from RMB 297 billion in 2018 to RMB 507 billion in 2022, with an annual compound growth rate of 14.3%. The data management solutions market is expected to reach RMB 986 billion by 2027, with an annual compound growth rate of 14.2% from 2022 to 2027.

In the Chinese data management solution market, there are mainly three types of participants: traditional IT infrastructure providers, large internet companies, and professional data management service providers.

Traditional IT infrastructure providers offer customers hardware for IT solutions such as storage, servers, and network infrastructure products, while software is usually included in comprehensive solutions. Their competitive advantage lies in their rich experience in providing hardware products to enterprises (including state-owned enterprises in the financial services industry, telecommunications industry, and public institutions), which has gradually expanded to include data management solutions.

Large internet companies provide cloud-centric services, including cloud software, cloud platforms, and cloud infrastructure, covering a variety of services such as big data and AI, the Internet of Things, DevOps, and security solutions. The competitive advantage of these participants lies in their high reputation in providing data management services (including cloud-based data application services).

Professional data management service providers specialize in offering data management services for specific industries and possess several modular features. The competitive advantage of professional data management service providers lies in their strong expertise in providing data management services to public institutions and enterprises across different industries.