Unique Research · Insight · June 12, 2024
On April 23, 2024, Kunlun Tech (昆仑万维) released its 2023 annual report: revenue ¥4.915B (+3.8% YoY), attributable net profit ¥1.258B (+9.2% YoY) — dual growth in top and bottom line. After years of focus, the company has built a full stack spanning compute infrastructure, foundation models, and AI apps, positioning itself among China’s AI leaders.
Model breakthroughs & multi-line AI matrix
Kunlun tracked LLMs/AIGC from 2020. April 2023: Skywork (“天工”) 1.0 — dual-100B-class architecture on top GPU clusters, with ~3T high-quality Chinese tokens curated from tens of trillions of raw data. Feb 2024: Skywork 2.0 MoE — better complex tasks, latency, train/infer efficiency, scaling. April 17, 2024: Skywork 3.0 — 400B-parameter MoE, among the world’s largest/strongest open MoE models; tech-knowledge +20%, math/code +>30%; multi-turn search & tool use, charting, research/enhance modes, image edit/expand. On multimodal benches including MMBench, Skywork 3.0 beat GPT-4V on several metrics.
App matrix: AI search, music, video, social, games. Aug 2023: Skywork AI Search (China’s first search product with integrated LLM). Apr 17: SkyMusic. Apr 18: AI game Club Koala Alpha. Video and social AI also in flight toward commercialization.
Skywork AI — April’s fastest-growing domestic product
Unique Research’s April 2024 Global AIGC Traffic Monthly: Skywork AI MoM visits +120.30% — ahead of ACE Studio and Kimi.ai, #1 domestic MoM growth in April. Traffic/engagement sit just behind Baidu ERNIE Bot and Alibaba Tongyi among big Chinese players.
Six business lines: Opera (overseas info/metaverse), Star Group (entertainment social), Ark Games, Xianlai (casual), Kunlun Capital, and 2023’s AGI/AIGC focus — Skywork AI.
Search & ads drive dual growth
2023 revenue ¥4.915B (+3.8%). Games and social contracted some; search +21.22% and ads +28.95% vs 2022, to 23.25% and 33.63% of revenue. Domestic ¥688M (14.01%); overseas ¥4.227B (85.99%, +8.4% YoY) across Europe/US, SEA, Middle East, Africa.
Attributable net profit ¥1.258B (+9.15%). Non-GAAP / excluding non-recurring: ¥659M (−42.86%) — gap mainly fair-value and financial-asset/liability disposal gains/losses.
Gross margin & cash
Gross margin held 78.8% in 2022–2023 after rising from 2021 — search, ads, virtual items, subscriptions, API, custom work. Net cash +¥156M vs −¥592M in 2022 (+126.47%). Operating CF ¥885M (+6.48%); investing CF −¥431M (vs +¥805M in 2022, −153%) as outward investment stepped up; financing CF −¥288M (vs −¥2.285B, −87.37%) on less repayment/buybacks/equity payables.
R&D
Year-end: >1,500 R&D staff, 300+ masters/PhDs; recruited computer scientist Yan Shuicheng (global #56 / Chinese #14 / Singapore #1 per cited ranking). R&D spend ¥968M (+40.1% from ¥690M), 19.69% of total opex (from 14.58%) — search models, LLMs, multimodal. G&A share 17.52% (from 13.26%) on equity incentives; sales 32.95% (from 33.07%). Top revenue subs: Skywork AI Pte. Ltd. ¥1.289B; Opera Software Ireland ¥1.209B.
Skywork formally stood up
2023 “All in” AGI/AIGC; acquired Singularity AI and formed Kunlun Skywork AI — six lines (models, search, music, video, social, games). China: ToB (API/custom) + ToC (Skywork AI Search). Overseas: ToC UGC-oriented content tools. SkyMusic scored 6.65 vs Suno V3 on vocal/BGM quality, naturalness, intelligibility — cited as global AI-music SOTA. Club Koala Alpha + no-code Koala Editor + AI NPCs.
Opera
25+ years; >300M MAU globally. Opera One + native AI assistant Aria (OpenAI partnership) — interpret, translate, summarize, create, recommend; Refiner for style. Free with Opera account; Windows/macOS/Linux/Android/iOS; 180+ countries; 50+ languages. Opera GX: >4,500 Mods on GX.store; >7,000 games on GX.games; GX MAU 27.8M (+37% YoY); Aria on GX.
Investment arm
Kunlun Capital (since 2015): Dada, Dreame, Pony.ai, SVOLT, etc. Year-end invested capital ¥12.210B (+16.64% from ¥10.468B). Xiniu: 15 deals in 2023; largest — $160M acquisition of Singularity AI (NLP pretrained models / developer API). Kunuo Yingzhan net profit ¥752M. Strategy: beyond minority financial stakes, no more controlling/long-term investments outside AI up/downstream — “embrace AGI.”
Unique Research view
Chat still dominates. In April, Kimi.ai passed ERNIE as top traffic AI product in domestic + overseas Chinese-founder boards; user time-on-AI rises monthly. Personal chat assistants took 61.16% of total duration in April — still the main traffic door.
2C apps get a window. Model price wars squeeze pure-2B model vendors; 2C players can buy better models cheaper, grow trial users, and experiment — while still needing new monetization and rising UX bars.
Bottom line: With mix shift and AI leverage, Skywork + Opera can keep lifting organic growth if compute R&D, product matrix, and multi-line C-side keep compounding.
Author: Shen Liang · Editor: Qiuping. Charts attach on ingest (11 images).