iFLYTEK Co., Ltd.
Interim Report 2024
(English Simplified Version)
September 2024
Section I Important Notice, Contents and Definitions
The Board of Directors, Supervisory Board, and all senior managementmembers of iFLYTEK Co., Ltd. (the "Company") collectively guarantee thetruthfulness, accuracy, and completeness of the information in this InterimReport, affirming the absence of any false records, misleading statements, orsignificant omissions, and accept full joint and severable legal accountability forits contents.
Liu Qingfeng, the Company's Chairman; Wang Ming, the personresponsible for accounting; and Zhao Linyue, the head of the accountingdepartment (accounting supervisor), hereby declare that the financialstatements in this Interim Report are authentic, accurate, and complete.
All directors were present at the Board of Directors meeting that reviewedthis Interim Report.
In "Section III: Management Discussion and Analysis," under "X.Company's Risks and Countermeasures," the Company analyzes potentialrisks it faces along with corresponding countermeasures, and invites investorsto pay attention to these details.
The Company plans not to distribute cash dividends, issue bonus shares, orconvert capital reserves into share capital.
Contents
Section I Important Notice, Contents and Definitions ...... 2
Section II Company Information and Financial Highlights ...... 7
Section III Management Discussions and Analysis ...... 10
Section IV Corporate Governance ...... 42
Section V Environmental and Social Responsibility ...... 45
Section VI Significant Events ...... 54
Section VII Changes in Shares and Shareholder Information ...... 66
Section VIII Preferred Shares ...... 71
Section IX Bonds ...... 72
List of Documents for Inspection
1. Financial statements signed and sealed by the legal representative, the person responsible foraccounting, and the head of the accounting department.
2. Originals of all company documents and announcements publicly disclosed in the newspapersdesignated by the China Securities Regulatory Commission (CSRC) during the reportingperiod; and
3. The original Interim Report 2024 signed by the Chairman.
Definitions
| Term | refers to | Definition |
| Artificial Intelligence (AI) | refers to | Artificial Intelligence (AI) is an emerging field of technical science that involves the research and development of theories, methods, technologies, and application systems aimed at simulating, extending, and enhancing human intelligence. AI refers to artificial programs or systems capable of perceiving, recognizing, deciding, and acting like humans. Perceptual intelligence enables machines to "hear and speak, see and recognize," primarily involving technologies such as speech synthesis, speech recognition, image recognition, and multilingual voice processing. Cognitive intelligence allows machines to "understand and think," encompassing services such as educational evaluations, medical diagnostic aids, judicial assistance in courtrooms, intelligent customer support, and machine translation. |
| iFLYTEK Spark | refers to | Known as iFLYTEK Spark, this is a new-generation cognitive large language model (LLM) launched by iFLYTEK. It possesses cross-domain knowledge and language understanding capabilities, capable of understanding and executing tasks based on natural conversational interactions. It continuously evolves from massive data and extensive knowledge to achieve a full-process closed loop from proposing and planning to solving problems. iFLYTEK Spark has seven core capabilities: text generation, language understanding, knowledge-based Q&A, logical reasoning, mathematical ability, coding ability, and multimodal capacity. iFLYTEK Spark is empowering various industries, accelerating application implementation, collaborating with leading companies in multiple fields to set benchmarks for LLM applications, and co-creating the Spark ecosystem with individual users, developers, and corporate institutions. |
| Intelligent Speech | refers to | This technology enables machines to "listen and speak" like humans. It encompasses technologies such as speech recognition (automatically converting speech to text), speech synthesis (automatically converting text to speech), voiceprint recognition (identifying the speaker), and language recognition (identifying languages and dialects). These technologies are part of perceptual intelligence within artificial intelligence and serve as the core supporting technologies for the transformation of human-machine voice interaction. |
| Speech Synthesis | refers to | This technology automatically converts text to speech using machines. |
| Speech Recognition | refers to | This technology automatically converts speech signals into text and related information using machines. |
| Speech Evaluation (Spoken Language Evaluation) | refers to | This technology enables machines to automatically assess pronunciation levels, detect errors, and provide correction instructions. |
| Image Recognition | refers to | This technology uses computers to process, analyze, and understand images to recognize objects and patterns across various models. |
| Machine Translation | refers to | This is the process of using a computer to translate text from one natural language (the source language) to another (the target language). It is also known as automatic translation. |
| Natural Language Understanding | refers to | An important branch of research in computer science and artificial intelligence, it focuses on the theories and practices that enable effective communication between humans and computers using natural languages. Its ultimate goal is to enable computers to understand and use natural languages, such as Chinese and English, to facilitate natural language communication between humans and machines. This aims to replace part of human mental labor, including information retrieval, answering questions, excerpting documents, compiling |
| data, and handling all other tasks related to natural language. | ||
| “Super Brain 2030” Plan | refers to | Launched in 2022, this ambitious plan sets a strategic roadmap for advancing the company’s technological and product development over the medium to long term. This visionary plan aims to develop a complex intelligent system based on cognitive intelligence that enhances human-machine collaboration and self-evolution. This plan focuses on creating machines that surpass human perceptual abilities, deeply understand specialized domain knowledge, and continuously evolve autonomously. These machines are envisioned to fully perceive humans and their environments, possess emotional intelligence, and demonstrate flexible mobility and multi-dimensional expression. Aimed at integrating advanced family companion robots into numerous households, the core objective of this plan is to leverage artificial intelligence to address emerging social challenges and meet essential future demands, positioning iFLYTEK as a leader in global AI innovation. |
Section II Company Information and Financial Highlights
I. Company Information
| Stock Name | iFLYTEK | Stock Code | 002230 |
| Stock exchange | Shenzhen Stock Exchange | ||
| Company Name in Chinese | 科大讯飞股份有限公司 | ||
| Name Abbreviation in Chinese (if any) | 科大讯飞 | ||
| Company Name in English (if any) | iFLYTEK CO.,LTD | ||
| Name Abbreviation in English (if any) | iFLYTEK | ||
| Legal Representative of the Company | Liu Qingfeng | ||
II. Contact Information
| Secretary of the Board | Representative | |
| Name | Jiang Tao | Chang Xiaoming |
| Contact address | 666 West Wangjiang Road, High-tech Development Zone, Hefei | 666 West Wangjiang Road,High-tech Development Zone, Hefei |
| Telephone | Company Hotline: 4000-199199 Investor hotline: 0551-67892230 | Company Hotline: 4000-199199 Investor hotline: 0551-67892230 |
| Fax | 0551-65331802 | 0551-65331802 |
| taojiang@iflytek.com | xmchang@iflytek.com |
III. Other Relevant Information
1. Change to contact information
Is there change to the Company's registered address, office address and postal code, company website, emailaddress during this reporting period?
□ Yes √ No
No change has occurred to the Company's registered address, office address and postal code, company website,email address, etc., during the reporting period. For details, please refer to the Company’s 2023 Annual Report.
2. Change to outlets and websites for disclosure and the location where copies of this InterimReport is keptIs there any change to the outlets and websites for disclosure and the location where copies of this Interim Reportis kept during this reporting period?
□ Yes √ No
The websites of the stock exchange and media outlets where the Company discloses its Interim Report, as well asthe location where copies of this report are kept, have not changed during this reporting period. For details,please refer to the Company’s 2023 Annual Report.
3. Change to other relevant information
Is there any change to other relevant information during this reporting period?
□ Yes √ No
IV. Financial HighlightsDoes the Company need to retroactive adjust or restate accounting data for previous years?
□ Yes √ No
| Item | H1 2024 | H1 2023 | Change (increase/decrease) |
| Operating Revenue (RMB yuan) | 9,324,545,041.14 | 7,841,552,405.17 | 18.91% |
| Net profit attributable to the Company's shareholders (RMB yuan) | -400,665,617.21 | 73,571,996.11 | -644.59% |
| Net profit excluding non-recurring profits and losses attributable to the Company's shareholders (RMB yuan) | -483,098,935.79 | -304,109,160.61 | -58.86% |
| Net cash flows from operating activities (RMB yuan) | -1,535,556,254.51 | -1,528,741,829.11 | -0.45% |
| Basic earnings per share (RMB yuan) | -0.1736 | 0.0318 | -645.91% |
| Diluted earnings per share (RMB yuan) | -0.1729 | 0.0318 | -643.71% |
| Weighted average return on net assets (%) | -2.36% | 0.44% | -2.80% |
| Item | End of H1 2024 | End of 2023 | Change (increase/decrease) |
| Total assets (RMB yuan) | 38,256,440,253.38 | 37,831,122,978.15 | 1.12% |
| Net assets attributable to the Company's shareholders (RMB yuan) | 16,656,438,953.58 | 17,032,284,511.72 | -2.21% |
Note: For more reasons behind the changes in net profit attributable to the Company's shareholders and net profitexcluding non-recurring profits and losses attributable to the Company's shareholders, please refer to "III.Analysis of Core Business Activities: 1. Overview" under Section IIII below.V. Differences in Accounting Data under Chinese and International Accounting Standards
1. Differences in Net Profit and Net Assets in Financial Reports Prepared Under IFRS andCAS
□ Applicable √ Not applicable
There were no differences in net profit and net assets between financial reports prepared under the InternationalFinancial Reporting Standards (IFRS) and the Chinese Accounting Standards (CAS) during this reporting period.
2. Differences in Net Profit and Net Assets in Financial Reports Prepared Under OverseasAccounting Standards and CAS
□ Applicable √ Not applicable
The company did not experience any differences in net profit and net assets between financial reports preparedunder overseas accounting standards and the Chinese Accounting Standards (CAS) during this reporting period.VI. Non-recurring Profits and Losses: Items and Amounts
□ Applicable √ Not applicable
In RMB yuan
| Item | Amount |
| Gain or loss on disposal of non-current assets (including the write-off of provisions for impairment losses) | -1,382,878.19 |
| Government grants recorded in current profits or losses (excluding those that are closely related to the company’s normal operations, comply with national policies, and are consistently provided in a predetermined standard amount or quota that have a lasting impact on the company’s profits and losses) | 62,849,478.72 |
| Gains or losses from changes in the fair value of financial assets and financial liabilities held for trading and derivatives, and investment income from the disposal of these assets and liabilities, except for effective hedging related to the Company’s | 96,777,872.51 |
| normal operations | |
| Gains or losses on entrusting others with investment or asset management | 318,402.59 |
| Other non-operating incomes and expenses, except for the above items | -64,580,341.20 |
| Less: Income tax impact | 12,177,641.51 |
| Impact on non-controlling interests (after tax) | -628,425.66 |
| Total | 82,433,318.58 |
Clarification of other items of profits and losses qualified as non-recurring profits and losses
□ Applicable √ Not applicable
There are no other profits and losses that meet the definition of non-recurring profits and losses.
Clarification of circumstances where non-recurring profits and losses, as listed in Explanatory Announcement No.1 on Information Disclosure for Publicly Traded Companies — Non-Recurring Profits and Losses, arecategorized as recurring profits and losses
□ Applicable √ Not applicable
The Company does not have any circumstances where non-recurring profits and losses, as listed in ExplanatoryAnnouncement No. 1 on Information Disclosure for Publicly Traded Companies — Non-Recurring Profits andLosses, are categorized as recurring profits and losses.
Section III Management Discussions and AnalysisI. Business Highlights During This Reporting Period
1.Industry Overview
The Company complies with the disclosure requirements for the software and information technologyservices industry as stipulated in the Guidelines of Self-Regulation for Companies Traded on Shenzhen StockExchange No. 3: Industry Information Disclosure.Since 2023, the emergence of cognitive large language models like ChatGPT have demonstrated significantadvancements towards general artificial intelligence, marking a major technological leap in AI development.This has triggered a global surge in large language models, attracting major tech companies, significantgovernmental interest, and widespread industry adoption, which collectively highlight the vast potential of thesetechnologies to initiate a new growth era. In April 2023, Goldman Sachs forecasted that generative AI, driven bythese large language models, would increase global GDP by 7% over the next decade, amounting to nearly 7trillion US dollars. Further emphasizing this trend, Gartner's October 2023 report predicted that over 80% ofbusinesses will deploy generative AI by 2026.Continuous breakthroughs in AI development and its vast potential for growth are providing strongmomentum across the entire industry chain, transforming AI from a beneficial supplement to a core driver ofdigital and intelligent industry transformation. This shift moves the focus from “+AI” to “AI+”. As a pivotalforce in the latest industrial revolution, AI is rapidly becoming as fundamental as water and electricity,empowering diverse sectors and promoting societal progress and development.In terms of industry policy, artificial intelligence has been included in China’s National Program forMedium and Long-term Science and Technology Development (2021-2035), which serves as a prominentexample of the robust government support for the sustained development of the AI industry.
? January 31, 2024: During the 11th collective study session of the 20th Politburo of the CPC Central
Committee, General Secretary Xi Jinping stressed the need “to strengthen scientific and technologicalinnovation, especially original and disruptive innovations, accelerate the efforts to boost self-relianceand strength in science and technology, and do a good job in making breakthroughs in core technologiesin key fields, so that original and disruptive scientific and technological innovations can emerge oneafter another, and foster more momentum for the development of new productive forces."? March 2024: The government work report delivered to the National People's Congress further proposed
to "step up R&D and application of big data and AI” and to launch its AI+ initiative, underscoring thecritical role of AI in promoting economic and social development.
? June 2024: The Ministry of Industry and Information Technology, the Cyberspace Administration of
China, the National Development and Reform Commission, and the National Standards Committeejointly issued the Guidelines for Comprehensive, Standard and Systematic Development of the ArtificialIntelligence Industry (2024)," demonstrating a strong commitment to the systematic planning of AIdevelopment efforts and accelerating the establishment of a standards system that aligns with the high-quality development goals of the AI industry and empowerment for “AI+”.
? July 4, 2024: Premier Li Qiang of the State Council, at the 2024 World AI Conference and High-level
Meeting on Global AI Governance, announced that China will work to achieve the innovativedevelopment of artificial intelligence.
? July 2024: The Third Plenary Session of the 20th CPC Central Committee emphasized "boosting self-reliance and strength in science and technology," "fully leveraging the strengths of the new system formobilizing resources nationwide to improve China’s performance innovation across the board,""developing new productive forces characterized by high technology, high efficiency, and high quality,""updating policies and governance systems that promote the development of strategic industries likenext-generation IT and AI," and "recognizing the principal role of businesses in technologicalinnovation, establishing mechanisms to nurture and grow leading technology companies," reflecting theCPC Central Committee's resolve to support technological innovation.The gradual introduction and implementation of supportive industry policies will fuel the advancement ofChina's AI technology and the accelerated development of the industry, ultimately supporting the high-qualitydevelopment of China's economy. A favorable policy and macro environment is emerging for enterprises to drivecore technology innovation and the scaled industrial implementation of artificial intelligence.
2.Business Overview
Since its inauguration, iFLYTEK has adhered to a "reaching for the sky, rooted on the ground" developmentstrategy. "Reaching for the sky" refers to maintaining a leading international position in core technologies, while"rooted on the ground" involves the scaled industrial application of technological achievements. The Companycontinues to focus on core underlying AI technologies such as intelligent speech, natural language understanding,multimodal intelligence, and cognitive intelligence, managing to always remain at the cutting edge of the world.It actively promotes the research and development of AI products and their application in various industries,committed to making machines that can listen, speak, understand and think, and creating a better world with AI.iFLYTEK launched its advanced large language model, known as “iFLYTEK Spark”, on May 6, 2023,building on its long-term development of foundational core technologies. This model is undergoing continuous,rapid enhancements and iterations. Through rigorous, systematic, and authoritative evaluations, iFLYTEK Sparkhas established itself as a leader among testable large language models developed by Chinese companies. It nowserves as the foundational platform for the Company's AI industrialization, playing an increasingly crucial roleacross various business sectors and in the operation of its open platform.
iFLYTEK has adopted a two-prong “platform + business” approach, positioning itself as a leader in China’sAI industry. Through the iFLYTEK Open Platform, one of the first national new-generation AI open innovationplatforms, the Company empowers developers with 708 AI capabilities and delivers comprehensive AI solutions.This initiative is continuously broadening the AI industry ecosystem, with a particular focus on key sectors suchas education, healthcare, smart cities, telecommunications, automotive, and finance. iFLYTEK sets practical,scalable, and verifiable benchmarks for AI applications, establishing sustainable “strategic bases”. Additionally,the Company has secured a prominent market position and reliable revenue streams through consumer products,including AI learning devices, smart notebooks, recorders, translators, hearing aids, and iFLYREC .
Figure 1: Overview of iFLYTEK’S key businesses
3.Major Business Developments During this Reporting Period
iFLYTEK’s Large Language Model:iFLYTEK SparkAs China's leading artificial intelligence company, iFLYTEK has built the country's State Key Laboratoryfor Cognitive Intelligence and the National Engineering Research Center of Speech and Language Information
Processing. The Company has exceptional expertise in deep learning and natural language processing.Significant early technological breakthroughs include the first AI systems to pass China's National PracticingPhysician Qualification Examination and China Accreditation Test for Translators and Interpreters (CATTI) atlevel II for Chinese-English interpreting, and machine reading comprehension capabilities that exceeded theaverage human performance in the SQuAD 2.0 challenge.
Building on its long-term expertise and robust foundations in AI, iFLYTEK launched its large languagemodel, known as 'iFLYTEK Spark', on May 6, 2023, which continues to be upgraded iteratively. In numerousrigorous, scientific, and authoritative third-party evaluations, iFLYTEK Spark consistently ranks first amongtestable large language models developed by Chinese companies. For instance, according to an evaluation reportby the Xinhua Institute released in August 2023, iFLYTEK Spark topped the overall rankings with the highestIQ and the strongest tool efficiency capability among Chinese large language models. Furthermore, a report bythe Development Research Center of the State Council in January 2024 stated that iFLYTEK Spark possesses thebest comprehensive capabilities among Chinese models and is internationally first-class.Continual upgrades and iterations of iFLYTEK Spark: On January 30, 2024, iFLYTEK Spark V3.5, an openmodel trained on China's first fully domestic TH/s computing platform Feixing-1, was released, surpassingChatGPT-4 Turbo in language understanding, mathematical abilities, and voice interaction capabilities,possessing 96% of ChatGPT-4 Turbo’s code and 91% of GPT-4V’s multimodal understanding capabilities.
Additionally, iFLYTEK has released its first voice model using iFLYTEK Spark’s foundational capabilities,surpassing OpenAI Whisper V3 across 37 languages in voice recognition and elevating the MOS score by 0.25on average across 40 languages in voice synthesis, achieving a near-human synthesis MOS of 4.5 with 83%human likeness.On April 26, iFLYTEK released iFLYTEK Spark V3.5, which supports long texts, extended mixed mediacontent, and long voice inputs. This update introduced the iFLYTEK Spark image-text recognition model,featuring multi-emotion hyper-realistic synthesis and single-sentence voice replication capabilities.On June 27, iFLYTEK Spark V4.0 was released. iFLYTEK Spark V4.0 is the only fully autonomouslycontrolled, domestically powered (trained on China's first fully domestic TH/s computing platform Feixing-1)open large model in China, and it matches up comprehensively with ChatGPT-4 Turbo. iFLYTEK Spark 4.0excels in 8 out of the 12 mainstream test sets in Chinese and English, both domestic and international. iFLYTEKSpark's voice model made further breakthroughs, possessing dialogue capabilities in 74 languages/dialectswithout the need for switching, solving the challenges of voice recognition under strong interference, andcapable of voice transcription in challenging and complex circumstances.
Strengthening domestic computation foundations to ensure the sustainable development of AI inChina: iFLYTEK, listed on the US Entity List and successfully countering extreme pressures, has graduallyachieved full autonomy in core technology research and product development. The core capabilities developedunder these conditions have given iFLYTEK a first-mover advantage in developing autonomously controllablelarge language models. In collaboration with Huawei, iFLYTEK is building computation foundations for generalAI in China, placing domestic large models on a platform of self-developed hardware and software, achievingfull autonomous control over the core technological infrastructure of these large models.On October 24, 2023, iFLYTEK, in collaboration with Huawei, announced the official launch of Feixing-1,China's first fully domestic trillion-parameter computing platform designed to support the training of largelanguage models. On January 30, 2024, iFLYTEK released its updated large language model, iFLYTEK SparkV3.5, which is a hundred-billion-parameter model trained on the Feixing-1 platform. This model boastsoutstanding performance indicators within China, confirming the reliability of Feixing-1. Then, on June 27,iFLYTEK launched SparkV4.0, also based on Feixing-1. This update enhanced seven core capabilities andachieved parity with ChatGPT-4 Turbo, further demonstrating the effectiveness of this computational platform.
Empowering the iFLYTEK Open Platform, Accelerating AI Ecosystem Development: On its Open Platform,the Company offers 708 AI capabilities and foundational capabilities of its large language model todevelopers/teams, fostering an ecosystem with an API matrix and a comprehensive third-party plugin market. Italso engages in industry collaborations and empowerment initiatives with startups and universities. From January30, 2024, when iFLYTEK Spark V3.5 was released, to June 30, 2024, the number of developers on theiFLYTEK Open Platform grew from 5.98 million to 7.06 million. The platform also supports more than 400,000overseas developers and 580,000 large model developers. For enterprises, the Company is enhancing industryempowerment, developing innovative applications of iFLYTEK Spark together with over 360,000 corporateclients, and has partnered with leading companies like Chery Automobile, Pacific Insurance, Bank ofCommunications, National Energy Group, and China Mobile to create benchmarks in industry-specific largemodel applications, accelerating industrial upgrades.
To accelerate the development of an original developer ecosystem, iFLYTEK launched the first open-sourcelarge model, Spark-13B, on January 30, 2024. This model provides developers, universities, and businesses witha comprehensive, independent, controllable, and free Spark optimization suite. It is not only highly optimized fordomestic computational resources but also delivers leading application performance in various scenarios. Thissupports enhanced academic collaborations and industry explorations.
Enabling diverse business applications: Since the official release of iFLYTEK Spark, it has achievedsignificant industrial application results across various business areas of the Company, including education,healthcare, consumer platforms, smart cities, and telecommunications.
1. Smart Education
In the field of education, guided by its commitment to "using artificial intelligence to aid education andprovide personalized instructions to realize dreams," iFLYTEK works to address major educational issues. Bydeeply integrating AI technologies in educational and teaching scenarios, and leveraging its foundational largemodel technologies, iFLYTEK provides targeted and convenient services to students, teachers, and educationadministrators at all levels. This facilitates the accumulation and application of data in the teaching and learningprocesses, helps reduce burdens and increase efficiency for teachers and students alike, and thus promoteseducational progress. Currently, iFLYTEK's smart education products are used in 32 provincial regions acrossChina as well as in overseas markets like Japan and Singapore.
iFLYTEK's smart education endeavors revolve around the goals of "reducing student homework burdenwhile improving learning quality; reducing exams while scientifically assessing learning effectiveness; andpromoting balanced education development while aligning with the goal of building a technologically advancednation." In line with national and regional strategies for achieving digital transformation in education and high-quality educational development, iFLYTEK systematically constructs a business system tailored to customers onthree sides: G (government), B (business), and C (consumer): G-side business mainly focuses on regionaldevelopment, including the county/district level, offering comprehensive education solutions for localeducational administrators and customized solutions for individual school teachers and students; B-sidebusiness primarily targets school infrastructure, offering smart blackboards, smart classrooms, big data-driventargeted teaching assistance, English listening and speaking classes, digital homework, and innovative educationsolutions; and C-side business primarily aims at parents as direct purchasers, offering products such as AIlearning devices, personalized learning guides, and after-school services.
In his report to the 20th National Congress of the Communist Party of China, General Secretary Xi Jinpingpromised to “promote the digitalization of education and build a society and country of learning where lifelonglearning is pursued by all.” It was the first time that “digitalization of education” was included as a goal in anofficial report delivered to the national congress of the CPC. In January 2024, Chinese Minister of EducationHuai Jinpeng stressed at the 2024 World Digital Education Conference that China “needs to place highimportance on the digitalization of education, treating it as a crucial breakthrough for pioneering new pathwaysin educational development and shaping new advantages.” On May 24, Deputy Minister of Education Wu Yanannounced at the Digital China Summit that China would implement an action plan to advance the application oflarge AI models in the education sector. This plan includes accelerating the development of an education-specificlarge AI model, designed to harness AI's capabilities to enhance personalized learning experiences. Thisinitiative aims to achieve the long-standing goal of personalized education, adapting teaching methods andmaterials to the needs and abilities of individual students. On July 19, Minister Huai Jinpeng stated at a pressconference held by the CPC Central Committee that China is committed to advancing the development of smartcampuses, deploying large AI models tailored for the education sector to enable mass personalized education andfoster innovative and personalized teaching methods, aiming to substantially enhance the quality of education tomeet the public's expectations. This initiative represents a strategic effort to integrate advanced technologies intoeducational activities, thereby enhancing educational outcomes and experiences across the country. Theaforementioned policies have created a favorable environment for the seamless integration of informationtechnology and educational practices through advanced artificial intelligence applications. Furthermore, these
policies offer strong support for iFLYTEK’s deployment of comprehensive, scenario-based smart educationsolutions.
1.1 Promotion of region-specific personalized education solutions
During the reporting period, iFLYTEK significantly expanded its personalized teaching solutions in fiveregions: Fugu County in Shaanxi Yulin, Zhuji City in Zhejiang, Pingtan Comprehensive Pilot Zone in Fujian,Jingzhou City in Hubei, and Changchun City in Jilin. These efforts supported the “Double Reduction” initiativeas part of China’s ongoing education reform, notably with a smart homework project in Xiaoshan District,Zhejiang. Collaborating with the Hubei Provincial Department of Education, iFLYTEK helped establish aprovincial-level education data center, setting benchmarks and advancing the digital transformation and qualitydevelopment of education. To date, iFLYTEK’s personalized education solutions have been implemented in over60 cities, districts, and counties, proving effective in reducing workload and increasing efficiency for teachersand students alike. This scaled application has increased the efficacy of regional teaching management throughdigital tools, with intelligent teaching assistants significantly easing teachers' grading and planning burdens.Additionally, it has developed student-centered learning profiles, increased teaching effectiveness, tailoredinstruction to individual learning needs, and shifted away from rote learning methods. These widespreadapplications have markedly enhanced teaching quality in these regions.In the same period, intelligent grading technology has been successfully applied in paper grading for collegeentrance exams across 14 provinces and cities. In 2024, the application of this technology in paper gradingextended to cover college entrance exams in one additional province and 3 cities, along with the middle schoolexams in 3 more prefecture-level cities. Now, it covers college entrance exams in 25 provincial regions andmiddle school exams in 111 cities, enhancing the accuracy and efficiency of grading.
1.2 Enhancing product value in school scenarios
In the classroom, the “Three New” teaching reform is deepening with an extensive roll-out of personalizedand innovative teaching methods. In response, iFLYTEK has upgraded and integrated its previously separate andindependent smart classroom and smart window products into a unified, green, safe, and intelligent “classroomproduct system”. This integration has led to the creation of a new brand of intelligent equipment that consolidateshigh-quality teaching resources and tools across various scenarios. This comprehensive digital and intelligentsystem is designed to better cater to the primary teaching environments, continuously enhancing the quality ofeducation and creating sustained value for users.
In the field of intelligent equipment, the launch of iFLYTEK Spark 4.0 has redefined classroom screens viathe Spark Smart Blackboard. This technology incorporates multi-modal understanding and recommendation,fully natural interaction, virtual assistant learning, and intelligent recording and sharing, four key features thattransform traditional blackboards into AI teaching assistants. In the realm of lesson preparation and delivery, theSpark Teacher Assistant has expanded its capabilities in subjects like mathematics, English, and Chinese,introducing new real-time recording and classroom analysis tools that now serve nearly ten thousand teachers.Data indicates a 56% increase in the efficiency of resource retrieval and presentation creation, with a satisfactionrate exceeding 85%. Moreover, the latest generation of smart classrooms, which connect large screens to students’mobile devices, enhances teaching efficiency and effectiveness through an integrated teaching and evaluationsystem. This system supports the innovation of teaching methods and improves overall teaching quality.
Regarding schooling data services, in response to the ongoing implementation of the “Double Reduction”policy, the increasing demands of exam management, and the broader context of digital education, iFLYTEK hasupgraded and integrated its digital teaching products, which were originally designed for independent use inexams and homework support. This integration has resulted in the creation of a comprehensive and efficient“schooling data service system”. This system extends across all school-related scenarios, both inside and outside
of the school environment, benefiting a variety of educational roles including administrators, teachers, andstudents. It delivers continual value by reducing workload and meeting the personalized educational needs ofstudents.In the area of teaching management, iFLYTEK's “resource and supervision management” platform helps tooptimize the design and distribution of teaching resources for balance and efficiency. In examinations andhomework management, iFLYTEK's “precise exam and digital homework” system dramatically reduces the timetaken to design an exam paper from 2 hours to under 10 minutes. Additionally, the newly introduced iFLYTEKSpark Smart Grader cuts down grading time for all subjects and question types from 90 minutes to just 5 minutes.This system enables a teacher to scan, grade, and analyze an entire class's papers within 10 minutes, reducing theworkload significantly. It improves the adaptability of educational content by about 30%, delivering personalizedhomework tailored to individual learning needs and reducing ineffective practices.
In the area of after-school service, empowered by iFLYTEK Spark, a course platform provides a wealth ofquality course resources and content for teachers and students, greatly reducing the burden of teachers in lessonpreparation. Additionally, the “Inquisitive Classroom” module, which integrates cognitive big model ofiFLYTEK Spark and digital virtual person technology, can respond instantly to every child's curiosity in classand after class, effectively alleviating the contradiction between the limited knowledge reserve of front-lineteachers and the infinite curiosity of students, encouraging students to dare to ask questions, be good at askingquestions. The “Inquisitive Classroom” boasts an effective answer rate of over 98%. To date, after-schoolservices have covered over 13,000 schools in more than 460 districts and counties nationwide, graduallynarrowing the urban-rural gap, promoting balanced regional development, and driving the paradigm shift fromtraditional knowledge teaching to cultivating students' capabilities and comprehensive qualities.
At the same time, in alignment with the national initiative to pursue education, technology, and talentdevelopment goals at the same time, iFLYTEK has introduced a comprehensive science education solution tointegrate science education in basic schooling. This solution includes high-quality course resources, AI teachingtools, project-based inquiry systems, digital inquiry environments, and expansive social classrooms that bridgehome, school, and community. Additionally, it focuses on building a culture of science and technology amongeducators. These support teachers in delivering effective science lessons, enhance students' science andtechnology literacy, and inspire children to pursue their dreams of becoming scientists by instilling a passion forscience in their hearts.
In response to the national initiative to enhance digital education and universal digital literacy, iFLYTEKhas introduced a technology curriculum solution centered around experimental teaching and guided bycurriculum standards. This solution utilizes the cognitive big model capabilities of iFLYTEK Spark to addressthe challenges in teaching, learning, and evaluating information technology subjects. It significantly enhances theefficiency of teachers' preparation for experimental teaching, cutting down preparation time from 4 hours to just30 minutes. This not only boosts student engagement but also nurtures future talent equipped with digital literacyand innovative skills, aligning with national educational goals.
1.3 Promoting AI self-learning aids for students
Since its launch, iFLYTEK’s AI Learning Machine has been a leader in its market segment, introducing apersonalized and effective learning method, and consistently maintaining the highest Net Promoter Score (NPS)in the industry. Amidst fierce competition, the market share and brand recognition of iFLYTEK’s AI LearningMachine have continuously grown. With the release of the upgraded iFLYTEK Spark V4.0, the smart learningmachine now features an enhanced AI-based 1-on-1 tutoring function, pioneering a new interactive mode thatencourages children to think and ask questions proactively. In line with the 2022 curriculum standards, whichemphasize respecting individuality and autonomous learning, iFLYTEK has partnered with renowned national
institutions to develop high-quality learning content closely aligned with these standards, including AI-enhancedcourses in Chinese writing, intensive reading, cognitive development, and elementary mathematics, bringingchildren innovative ways of learning and a better learning experience.iFLYTEK’s key consumer product, Personalized Learning Handbook, has been further developed tointegrate iFLYTEK Spark’s cognitive big model capabilities. Features like English Essay Correction andPolishing blend language understanding and text generation for advanced corrections and address key challengesin English teaching for the “new” college entrance exam. New features such as Science Subjective QuestionCorrection enhance mathematical ability and logical reasoning through stepwise corrections and personalizederror correction. Additionally, in response to the trend of homework digitalization, the Digital HomeworkNotebook, developed to complement the Spark Smart Grader used by teachers, provides students withpersonalized homework tailored to their educational needs. This model has been successfully applied in keyschools across Jiangsu, Jiangxi, Hubei, Anhui, Shandong, Guangxi, and Chongqing, receiving favorablefeedback from schools, teachers, and students for its practical value in differentiated instruction.
2. Smart Healthcare
In the field of smart healthcare, iFLYTEK is committed to creating an AI diagnostic assistant for everydoctor and an AI health assistant for every citizen. Utilizing the foundational capabilities of AI, it empowers ahealthcare system that spans from community medical stations to hospitals, patients, citizens, and regionalhealthcare administrators. It offers products and solutions that cover the entire process from health risk earlywarning, early screening, diagnosis, treatment, follow-up on rehabilitation, post-diagnostic management, andchronic disease management.Marking a milestone with the breakthrough in medical cognitive technology by passing the general writtentest of China's National Practicing Physician Qualification Examination, iFLYTEK has continued to delvedeeply into medical natural language processing, medical knowledge learning, and knowledge representation.Based on massive industry data, the Company has developed a cognitive large model for healthcare based oniFLYTEK Spark (“medical big model”). In October 2023, iFLYTEK launched the Xunfei HealthBot to meet theconsultation needs of patients before, during, and after diagnosis. On June 27, 2024, the medical big model andthe Xunfei HealthBot were upgraded again, releasing a family health assistant. For the first time, a personaldigital health assistant went online, capable of constructing a "personal digital health space" based onindividualized data such as electronic medical records, test reports, and physical examination reports. Before apatient visits a doctor, it can help analyze the causes of illnesses, provide personalized judgments on drugcontraindications during medication, and give comparative data changes after examinations. By switching roles,it allows understanding of other family members' health conditions, creating also a health assistant for everyone.iFLYTEK’s smart healthcare business primarily includes services and solutions for community medicalinstitutions, hospitals, patients, and regional health administrators.
2.1 Community medical services
iFLYTEK’s medical services line consists of the “AI Medical Assistant” robot and the chronic diseasemanagement system, offering the first mature AI solutions aimed at community medical institutions.
AI Medical Assistant: iFLYTEK’s AI Medical Assistant, which passed the general written test of China'sNational Practicing Physician Qualification Examination in 2017, is the first and only system in the world toachieve this feat. It provides a technological foundation for general medical diagnostic assistance, offering AI-assisted diagnosis and treatment recommendations to doctors at community medical institutions. It enhancesmedical capabilities, standardizes diagnostic and treatment procedures, and reduces medical errors. It alsoprovides monitoring services for medical regulators such as provincial health commissions, achieving evidence-
based quality control and precise management. As of June 30, 2024, iFLYTEK’s AI Medical Assistant has beenimplemented in more than 53,000 community medical institutions across over 600 districts and counties in morethan 30 provinces nationwide, providing approximately 810 million AI-assisted diagnostic suggestions and about310 million electronic medical record recommendations. The system has corrected over 1.44 million valuablemedical records and identified 69 million inappropriate prescriptions. The reliability of initial diagnoses hasincreased from about 96% in 2021 to 98% currently, and the reliability of prescription audits from about 93% in2021 to about 97% currently, covering more than 1,800 diseases and significantly reducing the risks ofmisdiagnosis, missed diagnosis, and medication errors.Chronic disease management: iFLYTEK’s AI chronic disease management system automatically assistsfamily doctors with chronic disease screening, stratification, personalized health education, and automatedlifestyle interventions as part of everyday chronic disease management services. This allows family doctors tofocus on chronic disease diagnosis and treatment and patient care, effectively promoting the integration ofmedical prevention and improving the control of chronic diseases and reducing hospitalization rates forcomplications. During this reporting period, the system has been applied in the Economic Development Zone ofWuxi City in Jiangsu, Puyang County in Puyang City of Henan Province, Linzi District of Zibo City inShandong Province, with four new districts and counties added including Jieshou City and Yiwu County.
2.2 Hospital services
iFLYTEK’s hospital services include a smart hospital solution and Diagnostic Assistant, integrating diversemedical scenarios within the hospital ecosystem, enhancing the diagnostic and management efficiency of tertiaryhospitals and doctors while empowering medical services.Smart hospital solution: iFLYTEK provided a comprehensive solution that connects hospitals, doctors, andpatients before, during, and after diagnosis, aimed at improving doctors' efficiency in diagnostics and treatment.At West China Hospital affiliated to Sichuan University, this solution has supported pre-diagnosis triage for over13,000 symptoms and more than 5,000 diseases, accurately matching patients with the appropriate departmentsbased on their symptoms. In April 2024, iFLYTEK Medical, West China Hospital, and Huawei signed a strategiccooperation agreement. The three parties will utilize their respective resources and technological advantages todeepen collaboration in key areas such as innovative medical service models, improving medical experiences,and the application of large model capabilities for healthcare, aiming to promote the development of hospital AIand enhance public healthcare.Diagnostic Assistant: iFLYTEK’s Diagnostic Assistant primarily includes general and specialty ClinicalDecision Support Systems (CDSS) tools, such as the intelligent Venous Thromboembolism (VTE) preventionand management system and AI quality control across all cases, assisting hospitals and doctors in managingdiagnoses, treatments, and administration for general and specialty diseases, thereby enhancing the efficiencyand quality of services provided by tertiary hospital doctors. As of June 30, 2024, the specialty CDSS coversmore than 50 diseases, and the VTE system is able to make intelligent assessments for over 170 VTE-relateditems, with AI assessment achieving consistency rate of over 90% with expert assessments. It has providedservices to more than 40 hospitals among China's top 100 public hospitals, including the top 5 public hospitals.
2.3 Patient services
iFLYTEK’s patient services business line includes smart hospital patient services and post-diagnosticmanagement (including Xunfei HealthBot APP and mini-programs), the Imaging cloud platform, and intelligenthardware. By now, the scope of patient services has been extended to cover end-users within the medical system,supporting long-term and stable profitability and growth.
Smart hospital patient services and post-diagnostic management: iFLYTEK’s smart hospital patient servicesand post-diagnostic management platform is developed to customize post-diagnostic patient management plans.
Patients can maintain contact with doctors through this platform after receiving medical treatment, uploadrecovery information, receive medication reminders, and perform self-reporting. During the recovery process,patients can obtain answers to common questions through a medically knowledgeable chatbot built into theplatform, which also serves as a tool for doctors to collect and analyze data on patient recovery. During thisreporting period, upgrades have been made to address evolving customer needs, utilizing the latest technologicaladvancements such as AI large models. These upgrades include intelligent follow-up systems using hyper-realistic technology and enhancements to intelligent accompanying systems for medical large models, which areaimed at improving intelligent Q&A functionalities and the interpretation of examination reports. The latestachievements have been implemented in hospitals such as West China Hospital affiliated to Sichuan University,Tongji Medical College of Huazhong University of Science and Technology, Jiangsu Provincial People’sHospital, and the First Affiliated Hospital of the University of Science and Technology of China. Post-dischargefollow-up coverage at West China Hospital has reached 95% after the upgrade.Imaging cloud platform: Following national policy guidance and responding to healthcare system reforms,iFLYTEK Medical has actively promoted tiered diagnostic and treatment and established a mechanism for themutual sharing of examination results. The Anhui Imaging Cloud Platform provides remote medical imagingservices across the province and assists in implementing the tiered diagnostic and treatment system. Doctorsfrom hospitals at all levels in the province can upload imaging results to the cloud platform and consult imagingdata and reports uploaded by other hospitals. This helps achieve medical data interoperability, reducesunnecessary repeated examinations, and prevents patients from unnecessary radiation exposure. During thisreporting period, the Anhui Province Imaging Interconnection was selected as one of the top ten AI applicationscenarios in the Yangtze River Delta for 2024. As of June 30, 2024, the Anhui Province Imaging Cloud hasnetworked over 1,900 hospitals in the province, covering more than 30,000 doctor workstations through imagingdata interoperability between hospitals, with doctors accessing images over 400,000 times, patients viewingimages over 7 million times, and over 20 million reminders issued; more than 400 remote imaging consultationteams have been created, including over 3,000 registered consultation experts conducting over 7.5 million remoteconsultations. The imaging cloud platform has brought superior medical resources to the community level,enhancing the patient experience.Intelligent hardware: By the end of the 14th Five-Year Plan period, China's population aged 60 and over isexpected to exceed 300 million, transitioning the country from a mildly aged to a moderately aged society.Hearing loss is anticipated to become increasingly prevalent among the elderly. In 2022, iFLYTEK released itsintelligent hearing aids, and in the same year, an upgraded deluxe version was launched. Thanks to its excellentperformance, intelligent experience, and affordable prices, it has been fully recognized by the market andconsumers. In April this year, iFLYTEK launched the latest intelligent behind-the-ear hearing aid, featuring 64intelligent channels, 32 adjustable frequency points, and a full-scale gain of up to 70 decibels, meeting the needsof people with severe hearing loss. During the "618 Shopping Festival" (June 18 sales campaign) on China’s twomajor e-commerce platforms, JD.com and T-mall, it won first place in the hearing aid category on T-mall andsecond place on JD.com. As of June 30, 2024, iFLYTEK has over 90,000 registered intelligent hearing aid users.
2.4 Regional health administration solutions
This business line encompasses intelligent health solutions and smart medical insurance.Intelligent health solutions: iFLYTEK’s intelligent health solutions comprise an Infectious DiseaseMonitoring and Early Warning System, a Universal Health Information Platform, and a County-level MedicalCommunity Solution. These enable regional health administrators to monitor and manage the capabilities ofhealthcare professionals such as doctors at community medical institutions, as well as to conduct infectiousdisease prevention and control. For instance, in 2022, iFLYTEK Medical established an Infectious Disease
Monitoring and Early Warning System in Hefei, Anhui Province. Capable of comprehensive risk assessmentswith high sensitivity and accuracy, the platform performs spatial-temporal clustering analysis, epidemiologicaltrend extrapolation, and deep knowledge reasoning supported by medical knowledge graphs, enabling rapididentification of infectious disease outbreaks. This effectively supports emergency responses and public healthinvestigations, aiding the digitalization of infectious disease prevention and control. As of June 30, 2024, basedon multimodal data gathered from over 17,000 community medical institutions and about 20 tertiary hospitals,the system effectively monitored 41 statutory infectious diseases, 15 non-statutory infectious diseases, and sixmajor syndrome monitoring signals.Smart medical insurance: iFLYTEK Medical actively responds to the application of DRG/DIP paymentmethods by developing a comprehensive medical record analysis system to achieve smart medical insurancemanagement. Hospitals and doctors using iFLYTEK’s Smart Medical Insurance receive alerts about pre-hospitalmedical records, report bundled billing and other abnormal activities, and can promptly identify potentialcompliance risks. This system helps hospitals analyze, control, and coach on diagnostic pathways, medicalrecord front pages, and coding, enhancing the compliance of designated medical institutions, improving theregulatory efficiency, and achieving systematic and standardized fund management. After winning first place inthe National Medical Insurance Administration's Smart Medical Insurance Solution Competition in 2022,iFLYTEK’s Smart Medical Insurance has entered into normal operation in Lyuliang (Shanxi Province) and Pu'er(Yunnan Province), and has delivered products in Hefei (Anhui), Nanjing (Jiangsu), Guiyang (Guizhou),Changzhi (Shanxi), Wuzhou (Guangxi), and Jiujiang (Jiangxi). This further enhances application effectiveness,promoting coordinated development and governance of medical insurance, healthcare, and pharmaceuticals.
3. Smart City
In the smart city domain, iFLYTEK is leveraging the opportunities presented by China's digitaldevelopment initiatives, utilizing the leading foundational capabilities of its general AI large model iFLYTEKSpark. The Company captures the digital transformation needs of governments at all levels, continually rollingout innovative and competitive products and solutions. Focusing on government services, social governance, anddata utilization, iFLYTEK is enabling digital government services across comprehensive networks for integratedand collaborative management, service, and governance, supporting the digital transformation of governmentswhile reaping the value of data resources. Additionally, iFLYTEK provides cities with integrated solutions,including software, hardware, and operational support, for building intelligent computing centers. Notably, inLichuan (Hubei Province) and Wenzhou (Zhejiang Province), iFLYTEK has developed industry-specific largemodels based on its large language model iFLYTEK Spark to fuel local industrial growth. The smart city domainis now expanding into smart agriculture, smart parks, smart buildings, and smart water management,significantly broadening its market presence across China and establishing a robust, comprehensive, andecologically rich smart city framework.
3.1 Digital government
During this reporting period, iFLYTEK's digital government business made significant strides byintegrating the foundational capabilities of its large language model, iFLYTEK Spark, and leveraging its deepindustry expertise. The Company has achieved iterative enhancements to its digital government products andsolutions based on iFLYTEK Spark, using its upgraded foundational capabilities for digital government services,and creating a holistic digital solution that encompasses government services, social governance, communitygovernance, data governance, urban flood control, drainage, and digital twin for irrigation. Additionally,iFLYTEK successfully developed innovative large model-driven products such as Comprehensive WindowAssistant, Smart Inquiry and Handling, Digital Social Worker, and Law Enforcement Assistant.
In Anhui Province, iFLYTEK has continued to strengthen its presence in the local market, accelerating the
deployment of the first batch of digital government applications. In this province, the construction of focal pointsfor city integration has sped up, the county-level market continues to expand, and the operational model is beingdeveloped at a faster pace. The expansion of the national digital government market has accelerated, withiFLYTEK rolling out county-level solutions in partnership with enterprises in the ecosystem. Noteworthy marketbrands such as Shanghai Tangqiao's "Digital Social Worker" have been established, forming a series ofsignificant project prototypes. Up to now, iFLYTEK’s digital government solution has performed very well anddemonstrated effectiveness in cities like Pudong (Shanghai), Huangshi (Hubei), Benxi (Liaoning), and Chengdu(Sichuan). Moving forward, iFLYTEK’s digital government business will continue to build on its large modelcapabilities, upgrading its products and solutions, enhancing ecological cooperation, and supporting theimplementation of digital government applications.During this reporting period, iFLYTEK actively integrated intelligent computing power, foundational largelanguage model capabilities, and upper-layer application scenarios to empower the upgrade of traditional urbansectors and the cultivation of emerging industries, boosting the rejuvenation of urban industries. Currently, in thecity of Lichuan, Hubei, focusing on the construction of domestic intelligent computing centers and the incubationof large models for the cultural and tourism industry, iFLYTEK empowered the city’s digital economydevelopment, exploring a new model of iFLYTEK Spark empowering industries. In the city of Wenzhou,Zhejiang, iFLYTEK delivered comprehensive and high-quality cloud computing and artificial intelligenceservices to enterprises and public institutions.
3.2 Smart judiciary
During this reporting period, iFLYTEK’s legal large language model version 1.5 based on iFLYTEK Sparkwas released, trained on massive high-quality judicial data. This updated version, trained on massive high-qualityjudicial data, demonstrated a 13% improvement in performance over its predecessor, version 1.0, across 12fundamental industry capabilities. In addition to this enhancement, a specialized judicial knowledge base wasdeveloped. This foundation supports a variety of large language model scenario services tailored to the specificneeds of the legal sector. Among these, a streamlined court transcript recording system has been implemented inmore than ten courts, and the legal consulting service has generated a total of 70,000 legal complaints, receivingunanimous approval from the courts. Moving forward, the foundational capabilities of the large language modelwill be further leveraged to explore a model of fully integrated human-machine collaborative digital judgeassistant application in court trials, providing courts with intelligent tools to enhance the quality and efficiency ofcase handling.During this reporting period, the iFLYTEK Spark-based legal large language model was used to create aversion 2.0 of comprehensive human-machine collaborative services, which enhances the intelligence of thecourt case handling process, identifying bottlenecks in the case handling process more quickly and accurately.From January to June 2024, the People’s Court of Hefei High-tech Zone saw a continuous increase in the numberof new cases, ranking among the top in the city across 18 indicators. The quality and efficiency of the People’sCourt of Donghu District of Wuhan continued to improve, with the case processing cycle reduced by 51.89%,down 26.21%a year on year. Further efforts will combine foundational large language model capabilities toexplore a comprehensive service model at the provincial and municipal level, constructing provincial andmunicipal “12368” litigation services and intensive, refined cataloging services to enhance case handlingefficiency and reduce costs.
4. Open Platform and Consumer Business
4.1 iFLYTEK Open Platform
As one of the first new-generation artificial intelligence open innovation platforms in China, iFLYTEK
Open Platform actively builds “new productive forces” powered by large language models. The Companycontinuously advances the construction of its open service platform utilizing the foundational capabilities of itslarge language model, pursue innovative large language model development paradigms, establishes benchmarksfor scenario-based applications of large language models, and works to foster an open, innovative, autonomous,secure, and thriving new ecosystem. iFLYTEK Open Platform continues to provide developers, especiallyentrepreneurs at the forefront of innovation, with strong support in technology, branding, channels, andinvestment, aiding developers in their innovative explorations. In collaboration with industry ecosystem partners,the Company explores a range of sectors including intelligent manufacturing, energy, finance, e-commerce, andcustomer service, developing industry benchmarks and scenario-based solutions. This initiative drives and guidesAI developers in developing and implementing industry-specific applications.By the end of this reporting period, the iFLYTEK Open Platform had made 708 leading international AIcapabilities and solutions available to over 7.06 million developers who have created more than 2.48 millionapplications on this platform. Since its API became open in September last year, the iFLYTEK Spark platformhas attracted over 580,000 large model developers. The platform has launched online sites overseas in Singapore,South Korea, Japan, and Hungary, and established local operations teams in Singapore, Thailand, Malaysia,Saudi Arabia, and the UAE. With its multilingual AI capabilities, it has served over 400,000 developers abroadacross industries such as education, finance, government, and telecommunications. The Super Brain platform,focusing on embodied intelligence such as robot dialogue and understanding, significantly enhances multimodalinteraction capabilities. Currently, it covers 90% of the Chinese service robot market.iFLYTEK Spark is dedicated to making large language model applications universally accessible,transforming it into an AI assistant that deeply understands human needs. On June 27 this year, the Companylaunched iFLYTEK Spark V4.0, introducing the industry’s first “personal space.” This feature allows users toseamlessly store and manage content related to learning, work, life, and health, thereby enabling the model tooffer personalized services and generate customized content. Furthermore, iFLYTEK Spark provides an end-to-end, customizable intelligent agent development platform. This platform empowers users to create personalassistants without any coding requirements and enables developers to effortlessly build native applications,significantly enhancing the growth of the industrial ecosystem. Leveraging the foundational capabilities ofiFLYTEK Spark, the Company has created an AI-native application suite that includes intelligent PPT, adocument knowledge base, and role simulation. Additionally, our AI virtual human interaction platform haslaunched iFLYTEK Smart Creation, an AIGC product that has already attracted over 4 million users. Thisinnovative tool allows users to create personal digital avatars with just a single sentence, simplifying videocontent creation for everyone.In the arena of digital marketing, iFLYTEK’s AI marketing business leverages AI technology and big datato maintain a competitive edge. This is achieved by continuously enhancing operational efficiency and seizingnew business opportunities. iFLYTEK has evolved its AI algorithms and product solutions to establishpartnerships with all six major international 4A advertising agencies, leading to stable growth in customer baseand revenue, and setting benchmarks with several key account (KA) customer case studies in various industries.With its global expansion strategy well underway, iFLYTEK has made significant inroads in the overseas digitaladvertising market. Utilizing its AI algorithm capabilities, the company has rapidly expanded its e-commerceclientele and cost per sale (CPS) business, covering top e-commerce platforms across Southeast Asia, Europe,and America. It has also strategically developed the overseas traffic ecosystem, enhancing collaborations withdevelopers, manufacturers, and top-tier aggregation platforms, achieving over 10 billion daily page views (PVs).The swift advancements of iFLYTEK Spark have injected new momentum into marketing solutions. In the firsthalf of 2024, the iFLYTEK Marketing Assistant, built on iFLYTEK Spark, was entitled the Best Digital
Marketing Platform of the Year by the Golden Mouse, laying a robust foundation for exploring new AImarketing opportunities.
4.2 Consumer business
The consumer business always centers around the user, growing through deeply understanding user needsand steadily enhancing product competitiveness. With the support of iFLYTEK Spark, the Company’s consumerbusiness continues to strengthen the application of AI technology in both software and hardware products,regularly updating and iterating hardware and software products and services to make them efficient andconvenient and consolidate industry leadership.
During this reporting period, iFLYTEK’s AI consumer products performed very well at major sales events.During the "618 Shopping Festival", the GMV for smart office notebooks, translators, and recorders increased by43% year on year. The Company continued to capture the sales championship across several categories on bothJD.com and T-mall, winning broader consumer favor, with user satisfaction and positive product ratingscontinuing to rise. On the software side, products such as iFLYTEK Spark, iFLYTEK Input Method, iFLYREC,and others that are based on iFLYTEK Spark, significantly enhance user experience, making work more efficientand life more convenient.
During this reporting period, while domestic operations flourished, the consumer business accelerated itsexpansion into overseas markets. Business units such as consumer hardware and software have been strategicallydeployed in regions including Europe, the Middle East, and Asia-Pacific, and were introduced in large-scaleinternational trade shows and market events. During the Mobile World Congress in February 2024, iFLYTEK'sproducts, such as its translator, smart recorder, audiobooks, Simultaneous Translation app, and virtual humans,received high attention and praise, enhancing iFLYTEK's international brand image. Meanwhile, theconstruction of overseas platforms has progressively advanced. The systems supporting overseas channelpartnerships, brand marketing, sales, after-sales service, and local offices have been further strengthened, layinga solid foundation for the expansion of its consumer business abroad.
Figure 2: iFLYTEK’s smart office hardware products
4.2.1 AI+ office scenarios
iFLYTEK Smart Office Notebook: During this reporting period, iFLYTEK’s Smart Office Notebookcontinued to lead the ink screen market, with sales in the first half of the year increasing by 40% year on year. Atthe mid-year "618 Shopping Festival”, it maintained its position as the top-selling product on JD.com, T-mall,and Douyin for the fourth consecutive year (source: JD.com Business Intelligence & T-mall Business Advisor),continuing to lead the industry. The X3 series has continued to hold the top spot in the office category,solidifying its flagship status.
Driven by the continuous iteration of iFLYTEK Spark, iFLYTEK’s Smart Office Notebook series has
upgraded the effectiveness of its AI functions such as "Meeting Minutes," "AI Writing," "Spark Q&A," and "AIWeekly Reports." New AI features like “Document Reading” and “AI Assistants” were also introduced, focusingon personal office scenarios to help users enhance their office efficiency. Users have highly rated the product'stranscription accuracy, writing experience, and core functions like the large model capabilities of iFLYTEKSpark, with e-commerce positive reviews exceeding 98%. iFLYTEK continues to drive and participate in theformulation of related standards for smart office notebooks, serving as the leader in drafting the T/DZJN 228-2024 standard for Electronic Paper Meeting Notebooks organized by the China Electronic Energy SavingTechnology Association, enhancing industry influence and promoting industry-standard development.iFLYTEK Smart Recorder: During this reporting period, iFLYTEK’s Smart Recorder continued to lead thesmart recording industry, securing the top sales position on JD.com and T-mall during the "618 ShoppingFestival" promotion campaign for the seventh consecutive year (source: JD.com Business Intelligence & T-mallBusiness Advisor).Power by iFLYTEK Spark, iFLYTEK’s smart recorder can instantly generate meeting minutes, extract keyinformation, generate to-do items, and intelligently remove filler words, significantly improving work efficiency.In foreign language classrooms or speeches, the Simultaneous Translation feature allows users to listen to thetranslated audio through headphones, facilitating the understanding of classroom content or speeches, making therecorder a smart assistant for office and learning purposes.In the first half of 2024, iFLYTEK continued efforts to expand into the overseas market, developing newlocalized online and offline sales channels in markets such as South Korea, Singapore, the USA, and Canada.Product sales and user reputation have steadily enhanced, with users now spanning Asia, Europe, America, andother regions across 180 countries.iFLYREC (Meetings + SaaS): During this reporting period, iFLYTEK launched a large smart office model,which is deeply integrated into the iFLYREC Meeting Office product series, providing government andcorporate clients with a continuously optimized “AI+ office” service solution. iFLYREC Meeting Office hasnow served 3,000 government and corporate clients. In industry applications, the iFLYREC smart meetingsystem has served the national CPPCC sessions for six years and supported NPC and CPPCC meetings at variousvenues for three years. Moving forward, it will deliver more technologies in key regions such as Anhui Province,Zhejiang Province, Shanghai, Yunnan Province, Guizhou Province, Henan Province, and the Guangdong-HongKong-Macao Greater Bay Area, enhancing the efficiency of smart governance. On July 4, 2024, the iFLYRECSmart Office solution was awarded the "Top 10 Corporate Digital Empowerment Cases of China 2024" by theZhongguancun Digital Economic Industry Alliance.During this reporting period, iFLYREC Simultaneous Translation provided global users with high-qualitylanguage service solutions, delivering 22% more conference services than the previous period. It continued toprovide AI-based Simultaneous Translation services to dozens of Fortune 500 companies and internationalevents such as the Zhongguancun Forum in Beijing, the Mobile World Congress in Spain, the InternationalAdvertising Festival in Malaysia, and the BEYOND EXPO in Macau. Additionally, public cloud services andproduct innovations continue to break through, further expanding iFLYTEK's influence in the internationalmarket. In public cloud services, iFLYTEK’s Simultaneous Translation app registered a 168% increase year onyear, and app services were launched in the Hong Kong and Macau, targeting international clients primarily inthe Greater Bay Area. In terms of product innovation, iFLYTEK launched new Simultaneous Translationearphones for commercial scenarios, allowing users to immerse themselves in international conferences.iFLYTEK also reached cooperation intentions with several national museums and international scenic spotsusing Simultaneous Translation earphones. The international version of iFLYTEK Simultaneous Translation app,iFLYTRANS, now supports Japanese, Korean, and Traditional Chinese, and is available for all-in-one and SaaS
deployments in Europe, the Middle East, and other regions.iFLYTEK's smart office SaaS platform drives user growth with innovative technology. During thisreporting period, the number of ecosystem users exceeded 200 million, reaching over 74 million terminal userswhich include more than 3 million monthly active users, ranking first in efficiency transcription in mobile appstores (iOS system). After the upgrade in 2024, iFLYTEK's smart office SaaS platform will integrate multiplesmart office hardware and software products from iFLYTEK to provide a one-stop smart office experience,achieving highly efficient AI office throughout the entire chain. In terms of business development, powered bythe foundational capabilities of iFLYTEK Spark, iFLYTEK Writing accrued 1240% more new paying users, andthe overall number of paying users on the platform exceeded 20% of the total. iFLYTEK has reachedcooperation with well-known enterprises such as China Telecom and Industrial and Commercial Bank of China,enhancing AI efficiency across various sectors. In terms of the international development of SaaS products,iFLYTEK’s iFLYREC and Simultaneous Translation app were launched in Hong Kong and Macau; Deepting,the international version, started market expansion in the European Union, the United Kingdom, Southeast Asia,Japan, and Korea. In terms of ecosystem development, iFLYTEK continued to deepen its strategic cooperationwith HarmonyOS and its smart office SaaS platform became one of the first native applications for HarmonyOS.
Enterprise Digitalization: During this reporting period, the iterated iFLYTEK Spark V4.0 significantlyenhanced seven core capabilities, leading to substantial upgrades in Digital Employee products. The iFLYTEKSpark Bid Evaluator offers Digital Employee assistance throughout the bidding process, significantly enhancingbidding evaluation efficiency. Utilizing the foundational capabilities of large language model, this DigitalEmployee analyze and identify essential bidding information such as "bidding requirements and key points,"automatically reviewing, scoring, and providing arguments, which boosts review efficiency by 75%. Operatingin sectors like energy, this Digital Employee serves prominent clients such as China National Coal DevelopmentCo., Ltd., creating "AI bid evaluators" that intelligently elevate corporate procurement processes.
The iFLYTEK Spark Contract Assistant, another Digital Employee, manages the entire lifecycle of contractmanagement by resolving efficiency bottlenecks and management risks through utilizing the large languagemodel’s foundational capabilities. This establishes a scientific and standardized contract management system.This Digital Employee enhances the efficiency of contract drafting through generative techniques, reducecontract compliance risks through comprehensive risk reviews, improve contract performance efficiency viasemantic-level element extraction, and augment contract archiving efficiency through document knowledgeQ&A. Serving numerous large private enterprises, this Digital Employee has notably assisted clients like WandaCommercial Management Group in reviewing an average of 300,000 contracts per month, substantiallyimproving review efficiency.
Additionally, the iFLYTEK Spark Smart Cockpit has served numerous large enterprises both home andabroad, markedly improving intelligent interaction efficiency in customers’ exhibition halls and managementscenarios. Leveraging large language model and AI capabilities, the iFLYTEK Spark Smart Cockpit facilitatesenterprise data Q&A, knowledge Q&A, and automatic explanations through interactive dialogues with virtualhumans (Virtual Employees). This greatly enhances efficiency and deeply empowers enterprises across multiplebusiness scenarios including exhibition hall presentation, data acquisition, and intelligent reporting.
4.2.2 AI+ life scenarios
iFLYTEK Input Method: Leveraging the comprehensive upgrade of iFLYTEK Spark, iFLYTEK hasadvanced its AI input method to adapt to user expression scenarios. As of June 2024, the monthly active users foriFLYTEK Input Method have increased by 3.6% year on year in the open market, maintaining the fastest growthrate in the industry. During this reporting period, iFLYTEK’s smart input function "Versatile Persona" was
released, enhancing the richness and fun of user expression content; the effectiveness of its AI voice input wasenhanced, further expanding its usage scenarios, with daily voice activation increasing by 15% year on year; andthe AI Pinyin engine was upgraded, significantly improving input efficiency.
Continued product innovation has led to enhanced input experience. iFLYTEK Input Method has furtherincreased its market attraction for young users, becoming one of the TOP 10 favorite apps among Gen-Z users. Ithas been widely recognized in the industry, winning the ITGSA 2023 "Quality Application in the UtilityCategory" as well as the "HarmonyOS Pioneer - Shining Star Plan Ecological Innovation Award" and"HarmonyOS Pioneer - Ecological Contribution Award." (Source: iResearch’s China Mobile Internet TrafficQuarterly Report Q1 2024.)iFLYTEK Translator: During this reporting period, the activation rate of iFLYTEK Translator grew by 74%and had the largest market share in the domestic market. Fueled by the full recovery of global tourism andbusiness activities, the demand and sales volume of iFLYTEK Translator have significantly increased. Duringthis reporting period, through the application of iFLYTEK's independently developed large language modeliFLYTEK Spark, the iFLYTEK Dual-Screen Translator and Translator 4.0 were launched after three majorupgrades, significantly enhancing the capabilities of automatic language recognition, translation accuracy, andpracticality, thereby further improving user experience. With its efficient and accurate translation andtranscription capabilities, iFLYTEK Translator is widely used in business negotiations, international conferences,international travel, and overseas studies, and is highly recognized and well-reviewed by users.iFLYTEK Sweeping and Mopping Robot: During this reporting period, after continuous upgrades,iFLYTEK’s AI-powered Sweeping and Mopping Robot X3 was officially released in March this year, achievinga 100% positive online review on JD.com. This robot, integrating the foundational capabilities of iFLYTEKSpark, possesses industry-leading voice interaction capabilities and precise positioning for cleaning, capable ofunderstanding and handling complex cleaning tasks under long voice commands. Also, by optimizing SLAMand path planning algorithms, the robot has significantly improved cleaning efficiency and positioning accuracy,optimized the recognition and obstacle avoidance capabilities in challenging home scenarios, making cleaningfaster and more reliable. Powered by AI, the cleaning scheduling architecture was continuously optimized,supporting users in real-time adjustment of cleaning strategies. During this reporting period, iFLYTEK’s AI-powered Sweeping and Mopping Robot X3 made its debut at the 4th China International Consumer ProductsExpo, where its excellent stain recognition and obstacle avoidance performance won high praise from users on-site.
5. AI Solutions for Enterprise Customers in Telecom, Smart Automotive, and Smart FinanceSectors
5.1 Telecom
iFLYTEK works to meet the needs of the three major telecom operators and TV broadcasters, especiallytheir digital transformation needs. In addition to enterprise users, the Company offers innovative 5G+AI productsand solutions for individuals and families, continuously creating value for users and injecting intelligence toboost the development of a digital economy society.
For individual users, utilizing the foundational capabilities of iFLYTEK Spark, iFLYTEK collaborates withtelecom operators to develop a comprehensive communication model, providing a series of products andsolutions for various call scenarios including pre-call, during the call, missed calls, and post-call. Collaborationswith the three major telecom operators include advancements in the 5G new calling domain, promoting thedevelopment of innovations like AIGC-based video ringtone content, Celebrity Caller ID, AI Secretary, and AI
Shorthand.For the family segment, in collaboration with telecom operators, an all-screen interaction large model isdeveloped. Leveraging the foundational capabilities of iFLYTEK Spark medical large model, products such asAI Family Doctor and TV AI Assistant have been launched to meet the needs of family users. The AI FamilyDoctor offers AI-based self-diagnosis of diseases and online health consultation services via TV screens. The TVAI Assistant, integrating virtual humans and voice interaction capabilities, provides users with services such asmovie and TV show recommendations, daily life information inquiries, and local service links.
Regarding corporate services, building on the core capabilities of its voice large model and iFLYTEK Spark,and targeting the high-demand scenarios for telecom operators, iFLYTEK puts the focus on smart customerservice, intelligent installation and maintenance, smart marketing, Digital Employees, among others, and hasintroduced comprehensive AI+ solutions based on its large language model.
5.2 Smart automotive
In the first half of 2024, the Chinese automotive market showed a strong momentum, with a rapid growth inthe sales of new energy vehicles, a sustained positive momentum in vehicle exports, and a steadily increasingmarket share for Chinese automotive brands. Overall, the Chinese automotive market is characterized by growthand diversified development. With the steady development and integration of LLM technologies, a significantimpetus has been injected into automotive intelligence. Smart cockpits are becoming more versatile, innovationsin intelligent driving technologies continue to emerge, and the application of vehicle networking has becomemore widespread.
During this reporting period, iFLYTEK’s smart voice business experienced a comprehensive upgrade due tothe enhancement of iFLYTEK Spark. The Company's products featuring multi-dialect, multilingual, and hyper-realistic speech synthesis capabilities have significantly improved to offer a freer and more human-likeinteractive experience. These product solutions have established deep collaborations with major domestic andinternational automotive companies such as Chery, GAC Group, Great Wall Motors, and Changan. On April 28,the first Chinese standards for automotive large language models, co-authored by the China Academy ofInformation and Communications Technology and iFLYTEK, was officially released. This standard is set topromote the application and efficient development of automotive large language models. In 2024, iFLYTEK'smultilingual capability played a crucial role in expanding into overseas markets and meeting the diverse needs ofdifferent regions, providing solid support and assurance for automobile exports. To date, iFLYTEK's voiceinteraction products have supported more than 25 foreign languages, covering key international markets in theMiddle East, South America, Europe, and Southeast Asia. New multilingual products have been deployed byseveral leading automotive makers in their overseas projects and are fast-tracking into the delivery and massproduction stage, poised to deliver advanced smart voice services to a broader global audience.
In the realm of intelligent sound effects, the Company has developed a premier smart automotive soundsolution, iFLYSOUND. This smart audio management system, through deep integration with voice, vision, andapplication ecosystems, has revolutionized the vehicle sound experience, transitioning from single-dimensionaland single-scenario to multi-dimensional and multi-scenario. The system features an array of advanced soundtechnologies including virtual surround sound, ambient sound enhancement, adaptive loudness compensation,intelligent scenario gain control, high-fidelity audio, in-vehicle communication enhancement, active noisereduction, advanced sound field management, personal sound zones, sound zoning technology, AI multitrack,hands-free karaoke, and the Spark Tuning Master. It offers a comprehensive subscription service modelencompassing sound libraries, sound wave libraries, sound effect libraries, and function libraries. As of now,iFLYSOUND has been implemented in over 40 car models from more than ten Chinese and joint-venture
automotive companies. In April of this year, a model equipped with the iFLYSOUND system won theProfessional Group A championship at the 2024 International Car Sound Challenge, hosted by the InternationalAuto Sound Challenge Association (IASCA). During this reporting period, sales of the iFLYSOUND systemdoubled compared to the previous year.In the realm of intelligent cockpits, iFLYTEK launched a newly upgraded smart cockpit solution at theiFLYTEK Spark V4.0 release event on June 27. This release also introduced cutting-edge technologies andcapabilities such as high-speed LLM-based interaction, full duplex intelligent interruption, seamless switchingbetween multiple languages and dialects, hyper-realistic emotional speech synthesis, an AI Gourmet Assistant,and visual-based Xunfei HealthBot for health monitoring, adaptive human voice separation, and hands-freekaraoke. iFLYTEK Spark applications achieved an industry-leading end-to-end response time of 1.5 seconds,making human-machine interaction more convenient, richer, faster, and smarter. On the hardware front,integrating advanced AI and domestic ZCU solutions, iFLYTEK smart cockpit’s domain controller is set to enterinto mass production in July this year.During this reporting period, the Company continued to strengthen its deep integration with upstream anddownstream companies in the automotive industry chain, establishing strategic partnerships with FAW, LivanAutos, Alipay, and China Automotive Data. In the first half of 2024, nearly 4 million sets of smart automotiveproducts were shipped, online interactions surpassed 6 billion, a year-on-year increase of 132%, and the monthlyactive users reached 27.28 million.
iFLYTEK's technological and application achievements in the smart automotive realm have received broadrecognition from the industry and market. Its Feiyu Scenario Intelligent Cockpit System won a special juryaward at the fourth CMG "China Automotive Epic Ceremony". Additionally, iFLYTEK, in collaboration withthe University of Science and Technology of China and the National Engineering Research Center for Speechand Language Information Processing, won the ASR and ASDR championships at the ICMC-ASR challenge.
5.3 Fintech
In the fintech realm, iFLYTEK primarily provides comprehensive digital management and operationsolutions for clients in financial sectors, including banking, insurance, and securities.
During this reporting period, iFLYTEK accelerated the implementation of its LLM iFLYTEK Spark infinancial sectors. By training specialized cognitive models for financial institutions and developing intelligentapplications for financial scenarios, iFLYTEK helped these institutions enhance their “new productive forces”and improve the quality and efficiency of financial services. Targeting high-frequency business scenarios infinancial institutions such as marketing, due diligence for risk control, customer services, and R&Dprogramming, iFLYTEK launched four intelligent products based on iFLYTEK Spark V4.0: Spark MarketingAssistant, Spark Due Diligence Assistant, Spark Customer Service 2.0, and iFlyCode (Spark code assistant). TheSpark Marketing Assistant performs multi-dimensional customer group profiling to generate marketingsuggestions and customized business strategies, offering real-time knowledge Q&A support for accountmanagers. The Spark Due Diligence Assistant can automatically access diverse information sources and extractkey data, using multi-dimensional credit risk analysis to generate draft reports instantly, significantly enhancingthe efficiency and quality of due diligence documentation for loans. Spark Customer Service 2.0 builds onupgraded technologies such as long-text processing, knowledge tracing, and hyper-realistic synthesis, enhancingfunctions like knowledge intelligent editing, agent planning, and workflow orchestration, simplifying userinteractions and optimizing business operations. iFlyCode, through pre-training and SFT training, significantlyimproves code recommendation adoption rates and integrates code review, automated testing, and programmingsuggestions, automatically generating high-quality unit testing code and reducing coding costs and barriers for
developers.During this reporting period, iFLYTEK advanced joint innovation with industry partners to speed up thedevelopment and deployment of large models in the financial industry. It signed strategic cooperationagreements with various financial institutions such as Bank of Beijing and Suzhou Bank, and deepenedcollaborative efforts in the "AI+Finance" sector with various organizations including Bank of Communications,Postal Savings Bank of China, PICC Group, China Everbright Bank, Shanghai Pudong Development Bank,Anhui Branch of Bank of China, Bank of Beijing, Huishang Bank, Bank of Ningbo, Xi'an Bank, Tangshan Bank,Guoyuan Securities, and Hu'an Securities, exploring innovative scenarios together. In collaboration with Bank ofCommunications, iFLYTEK created a hundred-billion-level financial large model, crafting end-to-end AIfinancial application scenarios in crucial business areas such as retail, inclusive finance, operations, and risk, andjointly announced joint AI innovation achievements at the 2024 World AI Conference. iFLYTEK is dedicated tosharing its experiences in implementing large model applications across the industry, actively contributing to thedevelopment of large model standards spearheaded by the China Academy of Information and CommunicationsTechnology, leading the development and release of the first domestic banking industry large model standard,and promoting the healthy development of large language models in the financial sector.II. Competitiveness AnalysisiFLYTEK, a pioneer in China's artificial intelligence industry, has cultivated deep expertise in AI overtwenty-five years, developing significant competitive advantages:
1. Internationally Advanced AI Core Technologies
As China's AI leader, iFLYTEK has established major national platforms, including the State KeyLaboratory for Cognitive Intelligence and the National Engineering Research Center of Speech and LanguageInformation Processing, as well as one of the first open platforms for new-generation AI innovation.iFLYTEK remains strongly committed to creating core technologies, keeping its key AI technologies at theinternational forefront. In recent years, though being placed on the US Entity List, iFLYTEK has focused on self-reliance and developed key AI technologies, winning numerous international authoritative challenges in the AIfield. This includes dozens of international AI contest championships across various domains such as intelligentspeech, machine translation, natural language understanding, image recognition and understanding, knowledgegraphs, and machine reasoning, thus continuously enhancing its global influence in the AI arena. In June 2024,iFLYTEK's was awarded the first prize of the State Science and Technology Award for its successful"Multilingual Intelligent Speech Technologies and Industrialization" project, the first AI project to win such anhonor since the global AI boom ignited by deep learning.iFLYTEK has accumulated substantial R&D strength in cognitive large models (LLM) and continues toachieve technological breakthroughs and innovations. iFLYTEK Spark was iterated to version 4.0 on June 27,2024. This version not only matches GPT-4 Turbo across various benchmarks (outperforming the latter in 8 outof 12 mainstream test sets (10 English evaluations such as HumanEval, WinoGrande and GPQA, and 2 Chineseevaluations C-Eval and CMMLU) but also spurred the development of software and hardware products tailoredfor education, healthcare, automotive, and corporate scenarios, showcasing the Company’s leading capabilities inlarge language model applications. iFLYTEK has become a large language model partner for key industryleaders such as State Grid Corporation of China, China National Petroleum, China Mobile, PICC, CPIC, Bank ofCommunications, Chery Automobile, FAW Group, Volkswagen, Haier Group, and Midea Group. The Companyhas co-built China’s first fully domestic massive intelligent computing platform "Feixing-1," and iFLYTEK
Spark is the only large language model trained with domestic computing power which is available for publicdownload thus far.
To date, iFLYTEK has led and participated in the formulation of over 100 intelligence speech and AIstandards. These include 3 international standards, 34 national standards, 9 industry standards, 8 local standards,and 24 group standards, covering areas such as speech recognition, speech synthesis, large language models,smart home, intelligent customer service, mobile terminals, vehicle terminals, smart TVs, and machinetranslation. For instance, in May 2023, iFLYTEK led the proposal of the international standard ISO/IEC24661:2023 "Information Technology - User Interfaces - Full Duplex Speech Interaction," which is the firstglobal standard in intelligent speech interaction. In July 2023, at the World AI Conference, iFLYTEK wasappointed co-chair of the national AI standardization panel for large language models. In July 2024, iFLYTEKled the proposal of the international standard ISO/IEC 5259-4:2024 "Artificial Intelligence - Data Quality forAnalytics and Machine Learning - Part 4: Data Quality Process Framework," which is the first AI data qualitystandard led by China.
2. From Core Technological Breakthroughs to Systematic Innovation and ScalableApplication
For core technologies, transitioning from R&D breakthroughs to scalable industrial applications is a high-threshold process. On one hand, innovations must expand from single-point breakthroughs to full-stacktechnologies across business chains and also identify large enough scenarios with appropriate business modelsfor business and technology to enhance each other, or otherwise the teams will remain merely as single-pointtechnology providers. iFLYTEK has consistently used artificial intelligence to address significant societal needs,gaining unique advantages in two main areas:
?Beyond maintaining continuous innovation and leadership in single-point core technologies, iFLYTEK
persistently expands and solidifies its technology tree through systematic innovation. For example, the
Company has progressed from speech synthesis to speech evaluation to speech recognition; from speech
recognition to text and image recognition; from single-modal recognition and synthesis to multi-modal
global perception and rich expression; from perceptual intelligence that can "hear and speak" to cognitive
intelligence that can "understand and think." It continues to tackle complex scenario problems through
multi-technology integrated innovation and leverages general-purpose algorithmic innovations to create an
"amplifier effect" across multiple technology domains, organically integrating various innovative
technologies in products and practical applications, thus driving the transition from single-point core
technology innovation to systematic innovation.?Aligning with the standards for AI value realization: "tangible application cases, scalable standard products,
and statistically verifiable application effectiveness", iFLYTEK has continuously promoted AI products and
solutions on a large scale in critical sectors of social wellbeing like education, healthcare, and urban
development, as well as in significant economic arenas such as automotive, finance, and consumer goods.
The Company has developed a wealth of application scenarios in cognitive intelligence, resulting in steadily
increasing profitability. Market success, in turn, reinforces iFLYTEK's deep understanding of industry
scenarios and algorithmic iterations, further enhancing its competitive edge across various sectors.
3. Technology Brand Credibility in the Industry and Extensive Marketing Network
The core technological capabilities of AI directly impact customer experience and application effectiveness,where high-quality practical results enhance customer satisfaction and business revenue. Builders and operatorsof intelligent speech and AI application systems place great importance on the application results delivered by
technology providers and select the most technically capable and successful providers through rigorous biddingprocesses. As a leader in China’s intelligent speech and AI industry, iFLYTEK has a rich portfolio of scalable AIapplication cases and statistically verifiable results that have earned the trust of industry clients and developers.The Company has established long-term strategic partnerships with market-leading developers in variousindustries, significantly enhancing its technology brand influence in the industry and competitive advantage.Particularly in vital sectors like education and healthcare, iFLYTEK's credibility as one of “China’s AI leaders”has been widely recognized by customers. The Company's brand assets rank 43rd on the list of BrandZ Top 100Most Valuable Chinese Brands, with a brand value of 4.342 billion US dollars.Based on years of industry experience, iFLYTEK has built a nationwide scalable marketing network,establishing 32 regional marketing agencies (for provincial clusters and state-owned enterprises under thecentral government) across all provinces. To better serve and stay closer to customers, iFLYTEK activelystrengthens team building and management in regions where it has operations. The front-to-back full-processintegration has built a unified sales service system, supporting the comprehensive and rapid promotion andimplementation of business products.III. Analysis of Core Business Activities
1. Overview
In the first half of 2024, the company adhered to the development strategy of “reaching for the sky, rootedon the ground,” steadfastly investing in the research and development of its large language model iFLYTEKSpark. This initiative solidly advanced long-term, sustainable, and high-quality development while maintaininghealthy growth in current revenue, gross profit, and user scale. Core businesses such as education, healthcare,automotive, open platform, and consumer products saw healthy development.
In the first half of 2024, while intensifying efforts on iFLYTEK Spark iterations and sustaining industryleadership, the Company expedited the practical deployment of the large language model. Simultaneously, byproactively adjusting the revenue structure, the Company achieved an 18.91% increase in revenue and a 19.08%rise in gross profit, respectively. Additionally, total sales receipts reached 9 billion RMB yuan, marking a year-on-year increase of 1.5 billion RMB yuan.
iFLYTEK Spark continuously strengthens the underlying AI technologies and its practical industryapplications, further establishing higher technological barriers and advantages in education, healthcare,automotive, open platform, and consumer products. In the first half of 2024, revenue from education productsand services reached 285,971.47 million RMB yuan, a year-on-year increase of 25.14%; healthcare servicesgenerated 22,810.16 million RMB yuan, up 18.80% year-on-year; the open platform made 234,459.88 millionRMB yuan, an increase of 47.92%; intelligent hardware earned 89,987.32 million RMB yuan, up 56.61%; andthe automotive business made 35,236.81 million RMB yuan, increasing by 65.49%. The healthy development ofthese core businesses fully demonstrates the momentum and potential of "AI+" in the Chinese market.
In the first half of 2024, the Company’s gross profit increased by 601 million RMB yuan, while net profitexcluding extraordinary items decreased by 179 million RMB yuan compared to the same period last year. Theprimary reason is the Company's proactive investments exceeding 650 million RMB yuan in general AIopportunities, including iFLYTEK Spark R&D, core technological autonomy, supply chain control, andindustrial application of iFLYTEK Spark. These investments, while impacting short-term performance, havesignificantly bolstered iFLYTEK's foundational AI capabilities, reinforcing its leadership in the Chinese AIindustry. On June 27, 2024, the upgraded iFLYTEK Spark V4.0 was released as scheduled. The new iFLYTEK
Spark, benchmarking against ChatGPT-4 Turbo (outperforming the latter in 8 out of 12 mainstream test sets, 10English evaluations such as HumanEval, WinoGrande and GPQA, and 2 Chinese evaluations C-Eval andCMMLU) , fueled the development of several software and hardware products targeting education, healthcare,automotive, and corporate intelligence sectors, demonstrating the Company's advanced LLM applicationcapabilities. iFLYTEK has partnered with key industry leaders including State Grid Corporation of China,PetroChina, China Mobile, PICC, CPIC, Bank of Communications, Chery Automobile, FAW Group,Volkswagen, Haier, and Midea Group. iFLYTEK Spark, trained on an entirely China-made intelligentcomputing platform Feixing-1 and available for public download, has reached 140 million downloads onAndroid, leading in China's general-purpose tool LLM apps (data from Qimai Data). The Company's voice andimage large models are internationally competitive. In June 2024, iFLYTEK's was awarded the first prize of theState Science and Technology Award for its successful "Multilingual Intelligent Speech Technologies andIndustrialization" project, a significant recognition in China's AI sector over the past decade. Facing intenseinternational competition and, in particular, the extreme pressure from the US, iFLYTEK has secured a uniqueposition in the AI arena, building a robust industrial ecosystem. In the first half of 2024, the developer base grewrapidly, with 1.279 million new developers added.Other factors contributing to the 474 million RMB yuan year-on-year decrease in net profit attributable tothe parent company include substantial investment gains from financial assets such as Three’S Company MediaGroup and Cambricon in the first half of 2023, with investment income and fair value changes decreasing by 149million RMB yuan compared to the same period last year, and other income decreasing by 146 million RMByuan. Provisions for bad debts increased by 83 million RMB yuan year-on-year (the Company's accountsreceivable mainly come from quality customers, with good customer quality, high safety of accounts receivable,and a historically low actual bad debt rate).In summary, during the first half of 2024, the Company swiftly advanced its LLM research anddevelopment on an independent platform, further solidifying its status as a leader in China's AI sector. Iteffectively explored key product directions for LLM applications and implemented strategic improvements to itsbusiness portfolio. As the AI industry benefits from an increasingly favorable development landscape, theCompany is poised to drive technological advancements and industrial growth from a more robust foundation,ensuring higher quality in its future endeavors.For details on the progress of various businesses, please refer to “Section III, I. Business Highlights DuringThis Reporting Period."
Year-on-year changes in key financial data
In RMB yuan
| Item | H1 2024 | H1 2023 | Change (increase/decrease) | Reason |
| Operating income | 9,324,545,041.14 | 7,841,552,405.17 | 18.91% | |
| Operating cost | 5,576,889,767.73 | 4,694,484,576.60 | 18.80% | |
| Sales expenses | 1,626,232,395.12 | 1,455,178,799.83 | 11.75% | |
| Overhead expenses | 612,118,633.24 | 561,374,268.79 | 9.04% | |
| Financial expenses | 64,225,790.96 | 4,135,375.16 | 1,453.08% | Mainly due to an increase in interest expenses |
| Income tax expenses | -122,083,458.87 | -58,089,297.85 | -110.17% | Mainly due to a decrease in total profits |
| R&D expenses | 2,190,927,332.72 | 1,655,745,127.23 | 32.32% | Mainly due to an increase in R&D expenses and development expenditures |
| Net cash flow from operating activities | -1,535,556,254.51 | -1,528,741,829.11 | -0.45% |
| Net cash flow from investing activities | -1,645,008,794.00 | -847,295,396.73 | -94.15% | Mainly due to an increase in expenditures for the acquisition and construction of long-term assets |
| Net cash flow from financing activities | 1,985,265,555.33 | 1,711,414,866.47 | 16.00% | |
| Net increase in cash and cash equivalents | -1,191,093,425.67 | -655,326,830.47 | -81.76% | Mainly due to a decrease in net cash flow from investing activities |
Significant changes in the composition or sources of profit during this reporting period
□ Applicable √ Not applicable
The Company have no significant changes in the composition or sources of profit during the reporting period.Breakdown of operating income
In RMB yuan
| Item | H1 2024 | H1 2023 | Change (increase/decrease) | ||
| Amount | Percentage | Amount | Percentage | ||
| Total operating income | 9,324,545,041.14 | 100% | 7,841,552,405.17 | 100% | 18.91% |
| By industry | |||||
| Main business | |||||
| Software and IT services | 9,147,037,034.51 | 98.09% | 7,687,303,276.63 | 98.03% | 18.99% |
| Education | 151,861,913.14 | 1.63% | 135,768,914.71 | 1.73% | 11.85% |
| Other business | 25,646,093.49 | 0.28% | 18,480,213.83 | 0.24% | 38.78% |
| By product | |||||
| Main business | |||||
| 1. Education | |||||
| Educational products and services | 2,859,714,719.89 | 30.66% | 2,285,269,310.27 | 29.14% | 25.14% |
| Teaching services | 151,861,913.14 | 1.63% | 135,768,914.71 | 1.73% | 11.85% |
| 2. Open platform and consumer business | |||||
| Open platform | 2,344,598,765.69 | 25.13% | 1,585,090,318.29 | 20.21% | 47.92% |
| Smart hardware | 899,873,232.51 | 9.65% | 574,594,957.61 | 7.33% | 56.61% |
| Mobile internet products and services | 267,435,160.71 | 2.87% | 263,321,828.49 | 3.36% | 1.56% |
| 3. Smart city | |||||
| Information engineering | 664,484,838.23 | 7.13% | 849,308,092.83 | 10.83% | -21.76% |
| Digital government applications | 225,483,944.62 | 2.42% | 354,120,052.72 | 4.52% | -36.33% |
| Smart legal applications | 296,104,259.51 | 3.18% | 302,109,880.52 | 3.85% | -1.99% |
| 4. Telecom | |||||
| Telecom operators | 902,148,046.37 | 9.67% | 969,395,553.89 | 12.36% | -6.94% |
| 5. Smart automotive | |||||
| Automotive intelligent networking | 352,368,066.05 | 3.78% | 212,924,088.84 | 2.72% | 65.49% |
| 6. Smart healthcare | |||||
| Healthcare | 228,101,617.41 | 2.45% | 192,003,282.25 | 2.45% | 18.80% |
| 7. Smart finance | |||||
| Smart financial products and solutions | 97,673,492.28 | 1.05% | 91,340,919.58 | 1.16% | 6.93% |
| 8. Others | 9,050,891.24 | 0.10% | 7,824,991.34 | 0.10% | 15.67% |
| Other business | 25,646,093.49 | 0.28% | 18,480,213.83 | 0.24% | 38.78% |
| By region | |||||
| Main business | |||||
| East China | 4,867,153,971.04 | 52.20% | 3,655,746,700.94 | 46.61% | 33.14% |
| North China | 1,483,719,212.57 | 15.91% | 1,220,551,556.37 | 15.57% | 21.56% |
| South China | 1,457,400,611.90 | 15.63% | 1,124,293,559.08 | 14.34% | 29.63% |
| Southwest China | 603,520,650.97 | 6.47% | 580,187,762.33 | 7.40% | 4.02% |
| Central China | 465,984,968.44 | 5.00% | 573,576,202.45 | 7.31% | -18.76% |
| Northwest China | 210,586,548.11 | 2.26% | 499,592,869.88 | 6.37% | -57.85% |
| Northeast China | 153,326,680.18 | 1.64% | 133,073,713.01 | 1.70% | 15.22% |
| Overseas | 57,206,304.44 | 0.61% | 36,049,827.28 | 0.46% | 58.69% |
| Other business | |||||
| East China | 25,646,093.49 | 0.28% | 18,480,213.83 | 0.24% | 38.78% |
Industries, products, or regions that account for more than 10% of the Company's operating income or operatingprofit?Applicable □Not applicable
In RMB yuanIn the event that the scope of data collection for the Company's main business is adjusted during the reporting
period, the main business data for the most recent fiscal year has been recalculated based on the adjusted scope atthe end of the reporting period.
□Applicable ?Not applicable
The Company must comply with the disclosure requirements for the “Software and Information TechnologyServices Industry” as specified in the Guidelines of Shenzhen Stock Exchange for Self-discipline Regulation of
Listed Companies No. 3 - Industry Information Disclosure.
Industries that account for more than 10% of the Company's operating income or operating profit:
?Applicable □Not applicable
| Item | Operating income | Operating cost | Gross margin | Change in operating income compared to H1 2023 | Change in operating cost compared to H1 2023 | Change in gross margin compared to H1 2023 |
| By industry | ||||||
| Software and IT services | 9,147,037,034.51 | 5,455,548,011.15 | 40.36% | 18.99% | 18.98% | 0.01% |
| By product | ||||||
| Educational products and services | 2,859,714,719.89 | 1,379,473,395.12 | 51.76% | 25.14% | 17.52% | 3.12% |
| Open platform | 2,344,598,765.69 | 1,957,514,595.33 | 16.51% | 47.92% | 65.88% | -9.04% |
| By region | ||||||
| East China | 4,892,800,064.53 | 2,807,415,312.29 | 42.62% | 33.17% | 24.55% | 3.97% |
| North China | 1,483,719,212.57 | 1,020,557,455.18 | 31.22% | 21.56% | 41.07% | -9.51% |
| South China | 1,457,400,611.90 | 937,451,122.50 | 35.68% | 29.63% | 34.79% | -2.46% |
Breakdown of operating cost
In RMB yuan
| Costs | H1 2024 | H1 2023 | Change (increase/decrease) | ||
| Amount | Percentage | Amount | Percentage | ||
| Material costs | 3,090,042,198.87 | 55.54% | 2,758,293,534.83 | 58.87% | -3.33% |
| Operating costs | 1,998,026,987.44 | 35.92% | 1,364,402,933.58 | 29.12% | 6.80% |
| Labor and outsourcing costs | 475,260,948.16 | 8.54% | 563,076,762.03 | 12.02% | -3.48% |
| Total | 5,563,330,134.47 | 100.00% | 4,685,773,230.44 | 100.00% | |
Reasons for data changes of more than 30% year-on-year
□Applicable ?Not applicable
IV. Analysis of Non-core Business Activities
?Applicable □Not applicable
In RMB yuan
| Item | Amount | Percentage of total profits | Explanation of causes | Sustainability |
| Investment gains | 1,439,417.31 | -0.24% | ||
| Gain/loss from fair value changes | 54,569,918.11 | -9.22% | Mainly due to the recognition of gains from fair value changes in UBTECH this period | Determined based on factors such as the secondary market stock performance |
| Asset impairment | -26,061,126.90 | 4.40% | ||
| Non-operating income | 12,469,501.28 | -2.11% | ||
| Non-operating expenses | 73,848,843.95 | -12.47% |
V. Analysis of Balance Sheet
1. Major Changes in Assets Composition
In RMB yuan
| Item | End of H1 2024 | End of 2023 | Change (increase/decrease) | Explanation of significant changes | ||
| Amount | Percentage | Amount | Percentage | |||
| Cash and cash equivalents | 2,371,636,371.21 | 6.20% | 3,562,635,256.73 | 9.42% | -3.22% | |
| Accounts receivable | 13,133,902,135.56 | 34.33% | 12,165,102,111.50 | 32.16% | 2.17% | |
| Contract assets | 824,168,261.88 | 2.15% | 912,202,079.94 | 2.41% | -0.26% | |
| Inventories | 2,271,085,187.23 | 5.94% | 2,458,967,642.86 | 6.50% | -0.56% | |
| Investment properties | 175,963,035.05 | 0.46% | 178,487,697.98 | 0.47% | -0.01% | |
| Long-term equity investments | 1,452,102,164.86 | 3.80% | 1,437,178,955.91 | 3.80% | 0.00% | |
| Fixed assets | 5,065,137,289.05 | 13.24% | 4,393,874,425.37 | 11.61% | 1.63% | |
| Constructions in progress | 1,058,662,456.59 | 2.77% | 1,241,004,506.05 | 3.28% | -0.51% | |
| Right-of-use assets | 289,013,458.48 | 0.76% | 357,713,784.46 | 0.95% | -0.19% | |
| Short-term borrowings | 651,489,745.90 | 1.70% | 242,723,392.49 | 0.64% | 1.06% | |
| Contract liabilities | 1,141,255,079.97 | 2.98% | 1,156,193,365.10 | 3.06% | -0.08% | |
| Long-term borrowings | 5,868,323,361.60 | 15.34% | 4,554,692,086.61 | 12.04% | 3.30% | |
| Lease liabilities | 184,248,933.64 | 0.48% | 245,614,518.45 | 0.65% | -0.17% | |
| Other current assets | 495,821,490.95 | 1.30% | 409,416,097.76 | 1.08% | 0.22% | |
| Long-term receivables | 1,151,548,278.37 | 3.01% | 1,224,651,761.01 | 3.24% | -0.23% | |
| Other non-current financial assets | 593,001,817.71 | 1.55% | 559,885,903.91 | 1.48% | 0.07% | |
| Intangible assets | 2,709,612,588.57 | 7.08% | 3,116,545,232.84 | 8.24% | -1.16% | |
| Development expenditure | 1,364,566,318.00 | 3.57% | 698,695,357.43 | 1.85% | 1.72% | |
| Goodwill | 1,134,673,186.61 | 2.97% | 1,134,673,186.61 | 3.00% | -0.03% | |
| Deferred income tax assets | 2,188,202,925.67 | 5.72% | 2,039,063,438.76 | 5.39% | 0.33% | |
| Bill payable | 2,410,590,367.47 | 6.30% | 2,776,112,860.37 | 7.34% | -1.04% | |
| Accounts payable | 5,268,713,351.74 | 13.77% | 5,100,694,119.20 | 13.48% | 0.29% | |
| Other payables | 693,871,571.98 | 1.81% | 883,036,586.43 | 2.33% | -0.52% | |
| Provision | 930,152,410.15 | 2.43% | 1,014,664,994.64 | 2.68% | -0.25% |
2. Status of Main Overseas Assets
□Applicable ?Not applicable
3. Assets and Liabilities Measured at Fair Value
?Applicable □Not applicable
In RMB yuan
| Item | Beginning balance | Gain/loss from fair value changes for this period | Cumulative changes in fair value recognized in equity | Impairment recognized in this period | Purchase this period | Sale this period | Other changes | Ending balance |
| Financial assets | ||||||||
| Other non-current financial assets | 559,885,903.91 | 54,569,918.11 | 21,454,004.31 | 593,001,817.71 | ||||
| Subtotal of financial assets | 559,885,903.91 | 54,569,918.11 | 21,454,004.31 | 593,001,817.71 | ||||
| Total | 559,885,903.91 | 54,569,918.11 | 21,454,004.31 | 593,001,817.71 | ||||
Other changesIs there any significant change in the measurement metrics of the Company's main assets during this reportingperiod?
□Yes ?No
4. Restrictions on Asset Rights as of the End of this Reporting Period
| Item | Book balance as of June 30, 2024 | Book value as of June 30, 2024 | Reasons for restrictions |
| Cash and cash equivalents | 179,819,472.26 | 179,819,472.26 | Margins for banker's acceptance bills and letters of guarantee |
| Bill receivable | 205,835,969.90 | 205,835,969.90 | Pledged for the Group's note pool business |
| Intangible assets | 341,160,417.18 | 271,506,831.97 | Mortgage loan |
| Total | 726,815,859.34 | 657,162,274.13 |
VI. Investment Analysis
1. Overview
?Applicable □Not applicable
| Amount of investments during H1 2024 (RMB yuan) | Amount of investments during H1 2023 (RMB yuan) | Change (%) |
| 41,537,782.94 | 263,476,221.69 | -84.23% |
2. Significant Equity Investments Received During this Reporting Period
□Applicable ?Not applicable
3. Significant Non-equity Investments Under Way During this Reporting Period
□Applicable ?Not applicable
4. Investments in Financial Assets
1) Investments in securities
?Applicable □Not applicable
In RMB yuan
| Type | Code | Name | Initial investment cost | Accounting measurement model | Beginning book value | Gain/loss from fair value changes this period | Cumulative changes in fair value recognized in equity | Purchase this period | Sale this Period | Gain/loss during this reporting period | Ending book value | Accounting entry | Source of fund | |
| Chinese and foreign stocks | 605168 | Three’S | 9,180,000.00 | Fair value measurement | 18,374,400.00 | -204,540.00 | 18,169,860.00 | -153,168.62 | 0.00 | Other non-current financial assets | Equity capital | |||
| Chinese and foreign stocks | H09880 | UBTECH | 5,832,490.19 | Fair value measurement | 73,237,552.18 | 50,980,641.80 | 0.00 | 50,980,641.80 | 124,218,193.98 | Other non-current financial assets | Equity capital | |||
| Total | 15,012,490.19 | -- | 91,611,952.18 | 50,776,101.80 | 0.00 | 0.00 | 18,169,860.00 | 50,827,473.18 | 124,218,193.98 | -- | -- | |||
2) Investments in derivatives
□Applicable ?Not applicable
There were no derivative investments during this reporting period.
5. Use of Raised Funds
□Applicable ?Not applicable
There was no use of raised funds to be disclosed during this reporting period.VII. Significant Asset and Equity Sales
1. Significant Asset Sales
□Applicable ?Not applicable
The Company did not sell any significant assets during this reporting period.
2. Significant Equity Sales
□Applicable ?Not applicable
VIII. Analysis of Major Holding and Participating Companies
?Applicable □Not applicableMajor subsidiaries and associated companies with at least 10% impact on the Company's net profit
In RMB yuan
| Name | Type | Principal business | Registered capital | Total assets | Net assets | Operating income | Operating profit | Net profit |
| iFLYTEK Intelligent System Co., Ltd. | Subsidiary | Education, software development, and information engineering | 406,000,000.00 | 11,179,322,703.15 | 1,919,505,797.51 | 2,181,433,459.02 | -123,034,981.99 | -92,212,879.64 |
| iFLYTEK South China Co., Ltd. | Subsidiary | Software development | 150,000,000.00 | 3,013,143,024.72 | 1,299,771,598.64 | 503,605,328.25 | 24,251,164.89 | 24,907,234.59 |
Acquisition and disposal of subsidiaries during this reporting period
□Applicable ?Not applicable
IX. Structured Entities Controlled by the Company
□Applicable ?Not applicable
X. Risks Faced by the Company and Countermeasures
iFLYTEK is committed to value creation and standardized operations, meticulously identifies various risks,and proactively implements strategies to mitigate and reduce risks in the following aspects.
1. Macroeconomic Environment
In recent years, the international landscape has become more and more complex, with ongoing interweavingof multiple risks such as global supply chain adjustments and geopolitical conflicts, leading to uncertainties in
the macroeconomic environment. The World Economic Situation and Prospects 2024 launched by the UnitedNations Department of Economic and Social Affairs indicates that global economic growth is expected to slowfrom 2.7% in 2023 to 2.4% in 2024. Similarly, forecasts by the International Monetary Fund and the World Bankpredict global economic growth rates of 3.1% and 2.4% for 2024, with the former remaining the same and thelatter down by 0.2 percentage points from the previous year.iFLYTEK adheres to a robust development strategy "reaching for the sky, rooted on the ground",maintaining leadership in vital autonomous technologies and advancing its “real needs + generational difference”approach in product applications. The Company effectively uses AI to meet critical societal needs acrossgovernment, business, and consumer sectors, creating resilient revenue streams that endure economicfluctuations and increasingly focuses on consumer-oriented businesses to navigate macroeconomic uncertainties.Amid demographic shifts like aging populations and falling birth rates, transitioning from demographic to talent,and subsequently to AI application dividends, is becoming essential for industrial progress. The large languagemodel iFLYTEK Spark has given the Company a unique early advantage in the digital economy, bolstering itsleadership in AI-enhanced education, healthcare, and industry digital transformation, while opening new avenuesin AI personal assistants and expanding the consumer product market. Additionally, iFLYTEK strategicallybalances risks and opportunities in both domestic and international markets to enhance its global positioning.
2. Business Innovation
To seize opportunities in the AI industry and adapt to the rapid technological advancements in the field,major companies are increasingly investing in R&D for new technologies and products. However, theindustrialization and commercialization of technology carry considerable uncertainties, posing risks that R&Dinvestments may not yield expected outcomes, thus affecting profitability and growth.iFLYTEK is deeply committed to its foundational technological innovation, anchored by strong AI coretechnology R&D. This commitment has enabled steady advances in technological and industrial development.The Company has developed a broad range of applications in cognitive intelligence, and its successes in themarket have further enhanced its deep understanding of industry-specific scenarios and its capacity foralgorithmic iteration. These achievements continually drive business innovation and mitigate the risks associatedwith exploratory ventures.XI. Progress and Outcomes of the "Dual Improvement in Quality and Returns" Action PlanHas the Company announced the "Dual Improvement in Quality and Returns" Action Plan??Yes □NoiFLYTEK has devised the "Dual Improvement in Quality and Returns" action plan to embody its investor-centric management philosophy as a listed company and protect investor interests, and reflect its confidence inthe AI industry's future and its future development, as well as recognition of the company's value. This plansolidly enhances the Company's quality and investment value, effectively fulfilling the responsibilities ofiFLYTEK as a listed company. For details, see the announcement published on February 8, 2024, in theSecurities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and on the CNINFOwebsite at http://www.cninfo.com.cn under the title "Announcement of iFLYTEK on the Dual Improvement inQuality and Returns Action Plan" (Announcement No. 2024-009). The Company has diligently implemented theaction plan, achieving outcomes in H1 2024 as follows:
1. Focusing on Value Creation, Actively Seeking Shareholder Returns
iFLYTEK is always committed to achieving long-term returns for investors through solid businessdevelopment and performance growth, enabling investors to realize long-term value. The Company will continueto advance its value management strategies, strengthen its core competitiveness, and improve main businessperformance to create value for its shareholders.
While prioritizing long-term development, the Company has maintained a stable profit distribution policysince its initial public offering 16 years ago, consistently issuing annual cash dividends. During the seventhmeeting of the sixth Board of Directors on April 21, 2024, and the 2023 annual shareholder meeting on May 13,2024, the profit distribution plan for 2023 was approved. This year's dividends are calculated based on the totalshare capital recorded on the equity registration date, excluding shares held in the repurchase account, with acash dividend of 1 RMB yuan per 10 shares (including tax), totaling 229,317,822.40 RMB yuan. Furthermore,the Company has established a "Three-Year Shareholder Return Plan (2024-2026)" to ensure a balancedapproach between company growth, performance improvement, and shareholder returns. This includes a sensibleprofit distribution strategy and active cash dividend payouts. Additionally, the Company utilizes strategies suchas share repurchases to boost investor returns and strengthen market confidence. Over the past three years, cashdistributions have amounted to 138% of the average distributable profits from the same period, effectivelysharing the fruits of the Company's growth and development with investors.
2. Adhering to Independent Innovation, Building Comparative Advantages
Since its founding 25 years ago, iFLYTEK has diligently concentrated on core AI technologies, includingintelligent speech, natural language understanding, machine learning, logic reasoning, and autonomous learning,consistently maintaining a leading position in the international arena. On June 24, 2024, iFLYTEK received withhonor the first prize of the State Science and Technology Award for 2023 in Beijing, as the leading contributingentity for its successful "Multilingual Intelligent Speech Technologies and Industrialization" project, the first AIproject to win such an honor since the global AI boom ignited by deep learning.
In 2019, iFLYTEK was placed on the US Entity List and faced further extreme pressures in 2022. Despitethese challenges, the Company escalated its investment in advancing core technologies and solidifying industrysupport, achieving outstanding results with the computing platform Feixing-1 which has laid a solid foundationfor the Company to maintain an advantage in the LLM race. On June 27, 2024, iFLYTEK Spark was upgraded asscheduled. The released iFLYTEK Spark V4.0 not only matches the capabilities of ChatGPT-4 Turbo, excellingin 8 out of the 12 mainstream test sets (10 English evaluations like HumanEval, WinoGrande and GPQA and 2Chinese evaluations C-Eval and CMMLU) but also spurred various software and hardware products foreducation, healthcare, automotive, and corporate intelligence, showcasing the Company's leading capabilities indeploying LLM applications. iFLYTEK has become the preeminent LLM partner for industry leaders such as theNational Energy Group, China Petroleum, China Mobile, PICC, Pacific Insurance, Bank of Communications,Chery Automobile, FAW Group, Volkswagen, Haier, and Midea Group.
Currently, as the AI industry continues to welcome an enabling industrial development environment, theCompany will enhance its technological and industrial advancement from a solid foundation, targeting long-termopportunities in the AI era. Remaining investor-centric, it is dedicated to achieving dual improvement in qualityand returns.
3. Strengthening Information Disclosure and Facilitating Investor Communication
iFLYTEK is committed to promoting transparent, regulated, and open development through effectiveinformation disclosure to protect investor rights. For 15 years since IPO, the Company's information disclosurehas been consistently rated as excellent (Grade A) by the Shenzhen Stock Exchange. According to statistics,
among all public companies listed in Shenzhen, only 8 have been rated excellent for 15 consecutive years,representing 0.30%. The Company continues to improve the quality of information disclosure year after year,strictly adhering to the law and the regulatory requirements of the China Securities Regulatory Commission andthe Shenzhen Stock Exchange. It provides multi-level, multi-angle, and comprehensive information on corporatemanagement, business operations, strategy, finance, industry, and other significant matters to investors,continuously enhancing transparency and safeguarding investor interests. The sufficient and accuratecommunication of the Company's intrinsic value aids investors' decision-making, especially those holding avalue investment philosophy.To ensure seamless access to information for investors, iFLYTEK has consistently broadened and deepenedits communication channels. Following the release of regular financial reports, the Company promptly organizesinvestor relations events. Recognizing investors' interest in engaging directly with the Company, iFLYTEKintroduced an innovative "Cloud Exhibition Hall." This virtual platform, accessibleat https://www.iflytek.com/exhibition.html, allows investors to virtually explore product information andbusiness applications in detail. Additionally, on April 23, 2024, iFLYTEK hosted a performance briefing from3:00 PM to 5:00 PM, immediately after publishing its 2023 annual and the first quarter of 2024 reports,facilitating both online and in-person discussions to proactively address investor queries.In April 2024, the China Association for Public Companies, Shenzhen Stock Exchange, and Shanghai StockExchange jointly held the first full-market investor relations evaluation, where iFLYTEK was selected as a caseof "Best Practice in Investor Relations Management" among listed companies. This accolade was furtherhighlighted by including iFLYTEK in the compilation of best practice cases.
4. Improving Corporate Governance to Promote High-Quality DevelopmentiFLYTEK is committed to being a public company that operates in compliance with regulations, embeddingstandardized governance into the core of its corporate culture. The Company continuously enhances itsgovernance framework, refines its corporate governance structure, and strengthens its comprehensive internalcontrol system. Through proactive governance activities, iFLYTEK ensures the effective functioning of itsgovernance structure which clearly delineates the responsibilities and powers of the Shareholders' Meeting, theBoard of Directors (both independent and non-independent directors), the Supervisory Board, and theManagement with respect to decision-making, execution, and supervision. The Board of Directors faithfullyimplements the resolutions of the Shareholders' Meeting, fulfilling its duty of integrity, while the Managementdiligently carries out the responsibilities entrusted by the Board of Directors. After a systematic evaluation by theChina Association for Public Companies, iFLYTEK has been honored with awards such as "Best Practice of theBoard of Directors," "Best Practice of the Supervisory Board," and "Best Practice in Corporate Governance,"which provide strong guarantees for effective corporate governance and the protection of shareholders' rights andinterests.
Leveraging its internationally advanced AI technologies, iFLYTEK will continue to harness AI to enhanceits corporate governance. In compliance with established corporate governance and internal control standards,the Company will employ AI and big data technologies to systematize and standardize its governance andinternal management processes, ensuring well-regulated operations. The governance framework encompassingthe Shareholders' Meeting, the Board of Directors, the Supervisory Board, and the Management will adhere tothe philosophy of “respecting the market and leveraging its power,” continuously enhancing operationalefficiency and decision-making science. This approach actively supports the Company's growth and strengthensits position through the strategic use of the capital market.
Section IV Corporate GovernanceI. Annual General Meeting and Extraordinary Shareholders’ Meeting Convened During thisReporting Period
1. Shareholders' Meetings in H1 2024
| Session | Type | Investor participation | Meeting date | Disclosure date | Resolution |
| First Extraordinary shareholders’ meeting in 2024 | Extraordinary shareholders’ meeting | 37.77% | January 25, 2024 | January 26, 2024 | The Announcement on the Resolution of the First Extraordinary General Meeting of Shareholders in 2024 was published on January 26, 2024, in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and on the CNINFO website at http://www.cninfo.com.cn (Announcement No. 2024-006). |
| 2023 Annual General Meeting | Annual general meeting | 31.14% | May 13, 2024 | May 14, 2024 | The Announcement on the Resolution of the Annual General Meeting of Shareholders for 2023 was published on May 14, 2024, in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and on the CNINFO website at http://www.cninfo.com.cn (Announcement No. 2024-030). |
2. Preferred shareholders with restored voting rights requesting the convening of anextraordinary general meeting
□Applicable ?Not applicable
II. Changes in the Company's Directors, Supervisors and Senior Management Members?Applicable □Not applicable
| Name | Position | Change | Date | Reason |
| Liu Xin | Director | Resigned | April 9, 2024 | Due to job adjustment, Liu Xin resigned from the position as director and accordingly, from the Strategic Committee of the Board. |
| Liu Wei | Chair of the Board of Supervisors | Resigned | April 9, 2024 | Due to job adjustment, Liu Wei resigned from the positions as supervisor and chair of the Supervisory Board. |
| Wang Hongxing | Director | Resigned | March 22, 2024 | Due to work reasons, Wang Hongxin resigned from the position as supervisor. |
| Chen Hongtao | Director | Elected | May 13, 2024 | Chen Hongtao was elected as director to fill the vacancy left by Liu Xin's resignation. |
| Cao Yingchun | Chair of the Board of Supervisors | Elected | May 13, 2024 | Cao Yingchun was elected as supervisor to fill the vacancy left by Liu Wei's resignation. |
III. Profit Distribution and Conversion of Capital Reserves into Share Capital in H1 2024
□Applicable ?Not applicable
The Company plans not to distribute cash dividends, issue bonus shares, or use capital reserves to increase sharecapital for this mid-year period.
IV. Implementation of the Company’s Stock Incentive Plan, Employee Stock OwnershipPlan, or Other Employee Incentive Measures?Applicable □Not applicable
1. Stock Incentive Plan
1) Restricted stock from the 2021 Stock Option and Restricted Stock Incentive PlanOn November 29, 2023, the Company's sixth Board of Directors at its fifth meeting approved the Proposalon the Cancellation of Some Stock Options Under the Stock Incentive Plan. Due to 26 beneficiaries of the stockoption plan not exercising their options within the valid period, the Company will cancel 154,090 unexercisedstock options. For details, see the announcement published on November 30, 2023, in Securities Times, ChinaSecurities Journal, Shanghai Securities News, Securities Daily, and on the CNINFO websiteat http://www.cninfo.com.cn titled "Announcement on the Cancellation of Some Stock Options Under the StockIncentive Plan." Simultaneously, at the same meeting, the "Proposal on the Repurchase and Cancellation ofSome Granted Restricted Shares" was approved. As 84 employees who were recipients of the restricted stockunder the 2021 Stock Option and Restricted Stock Incentive Plan had resigned, the Company plans to repurchaseand cancel 177,640 shares of restricted stock still under restriction, adjusting the number of incentive recipientsto 1,987 people. For details, see the announcement published on November 30, 2023, in the aforementionedpublications and on the CNINFO website titled "Announcement on the Repurchase and Cancellation of SomeGranted Restricted Shares." This repurchase and cancellation was completed on February 23, 2024.On April 21, 2024, the Company's sixth Board of Directors at its seventh meeting approved another"Proposal on the Repurchase and Cancellation of Some Granted Restricted Shares." Due to some employeesleaving, failing performance assessments, or not meeting the conditions for lifting restrictions from the 2021Stock Option and Restricted Stock Incentive Plan, the Company intends to repurchase and cancel 3,641,608shares of restricted stock still under restriction from the 1,987 incentive recipients, adjusting the number ofincentive recipients to 1,936 people. For details, see the announcement published on April 23, 2024, in SecuritiesTimes, China Securities Journal, Shanghai Securities News, Securities Daily, and on the CNINFO websiteat http://www.cninfo.com.cn titled "Announcement on the Repurchase and Cancellation of Some GrantedRestricted Shares" (Announcement No. 2024-023). This repurchase and cancellation was completed on June 7,2024.
2) Stock options from the 2021 Stock Option and Restricted Stock Incentive PlanOn April 21, 2024, the Company's sixth Board of Directors at its seventh meeting approved a "Proposal onthe Cancellation of Some Stock Options Under the Stock Incentive Plan." Due to some stock options from thethird exercise period of the Stock Option and Restricted Stock Incentive Plan not meeting the exercise conditions,the Company canceled 252,832 stock options granted to 65 incentive recipients during this period. For details,see the announcement published on April 23, 2024, in Securities Times, China Securities Journal, ShanghaiSecurities News, Securities Daily, and on the CNINFO website at http://www.cninfo.com.cn titled
"Announcement on the Cancellation of Some Stock Options Under the Stock Incentive Plan" (Announcement No.2024-024). This cancellation was completed on April 30, 2024.
2. Implementation of the Employee Stock Ownership Plan
□Applicable ?Not applicable
3. Other Employee Incentive Measures
□Applicable ?Not applicable
Section V Environmental and Social ResponsibilityI. Major Environmental IssuesIs the Company or its subsidiaries key corporate polluters announced by the environmental protection authorities:
□ Yes ?No
Administrative penalties for environmental pollution during this reporting period:
| Company name | Reason for the penalty | Violation | Penalty | Impact on the operations of the listed company | Corrective measures |
| N/A | N/A | N/A | N/A | N/A | N/A |
Other environmental pollution information disclosed with reference key corporate polluters:
iFLYTEK is a technology company engaged in artificial intelligence and software application development,which does not involve the discharge of industrial wastewater, waste gases, waste materials, or noise in its dailyoperations. The Company implements a comprehensive approach for waste reduction encompassinginfrastructure building, daily operation and living, park environment development, and resource conservation,demonstrating its commitment to sustainable development.iFLYTEK has established a series of Measures for Waste Gas, Wastewater, Noise, and Solid WasteManagement, firmly adhering to the "Reduce, Reuse, Recycle" (3R) principle. The Company recycles wastematerials to ensure effective control of emissions of waste gases, wastewater, and solid waste. It standardizeswaste collection, reuse, recycling, and harmless treatment to reduce environmental pollution and create a greener,more environment-friendly, and healthier work environment.
1. Waste Gas Management
iFLYTEK places a high priority on managing greenhouse gas emissions produced during its operations. Itenhances the identification and accounting of carbon emissions and formulates effective measures to reducecarbon emissions across the Company's operations and value chain.
Types of Greenhouse Gas Emissions
| Type 1 | Emissions from the combustion of fuels, including emissions from all vehicles the Company owns |
| Type 2 | Indirect emissions from consumption of purchased electricity, heat, and steam |
| Type 3 | Emissions associated with purchased goods and services, business travel, employee commuting, waste disposal, emissions from the sale and use of products, transportation and distribution activities, investments, leased assets, and franchise operations |
In the first half of 2024, the carbon emissions from daily consumption of electricity (excluding the energyconsumption for public capabilities such as IDC data centers) at iFLYTEK's headquarters 'increased by 5.50%year on year, mainly because, when economic and social activities struggled to recover in January 2023, manypeople were working from home and the Company's electricity consumption was relatively low. However,carbon and CO2 emissions per million RMB yuan of output value saw a decrease of 8.82% and 11.11%respectively in the first half of 2024 compared to the same period last year.
| Half year | Carbon emissions (tons | Change in carbon emissions | Carbon emissions per million yuan of output value (tons/million yuan) | Change in carbon emissions per million yuan of output value | CO2 emissions (tons) | Change in CO2 emissions | CO2 emissions per million yuan of output value (tons/million yuan) | Change in CO2 emissions per million yuan of output value |
| 2024 | 2,846.40 | 5.50% | 0.31 | -8.82% | 10,433.33 | 5.50% | 1.12 | -11.11% |
| 2023 | 2,697.97 | - | 0.34 | - | 9,889.24 | - | 1.26 | - |
The main sources of waste gas emissions in the Company's operations are the exhaust emissions frombusiness and commuting vehicles and the fumes from the canteen operations. The company has tried to reducewaste gas emissions using the following methods:
? Strengthening vehicle management and controlling waste gas emissions using fume purification devices;
? Formulating the Administrative Measures for Vehicle Management to optimize fuel use and vehicle
maintenance;
? Introducing electric buses in transportation services;
? Encouraging green travel and reducing commuting vehicle use through carpooling subsidies.
2. Wastewater Management
The main types of wastewater generated during the Company's operations are domestic wastewater andcanteen processing wastewater. The wastewater is managed through a separate sewer design, where toilet sewageis directed into the municipal sewage network; other wastewater, such as floor washing water, is discharged intothe sewage network within the park; and canteen wastewater is treated through oil separation and sedimentationbefore being discharged into the municipal sewage network.
3. Solid Waste Management
Each department within the Company is responsible for collecting, labeling, and storing solid waste in theirrespective areas and at the workplace according to solid waste classification requirements. Wastes are labeled as"Recyclable Solid Waste," "Non-recyclable Solid Waste," "Disposable Hazardous Solid Waste," and "Non-disposable Hazardous Solid Waste." Various types of solid waste, piled at designated locations, are uniformlycollected and transported by the contractor responsible for solid waste management.Solid Waste Classification
| General Solid Waste | Recyclable Solid Waste | Packaging materials, scrap wires, etc. |
| Non-recyclable Solid Waste | Domestic waste, kitchen waste, etc. | |
| Hazardous Solid Waste | Disposable Hazardous Solid Waste | Solid waste with oil, used gloves, used carbon boxes, used toner cartridges, etc. |
| Non-disposable Hazardous Solid Waste | Used batteries, spent fluorescent tubes, used computer screens, used electronic components, etc. |
The Company regularly inspects the storage and disposal of various types of waste, implementing multiplemeasures to effectively avoid the generation of wastes. For electronic products such as old servers, upgrades andmodifications are carried out to extend their service life; for retired and scrapped electronic equipment, they aredisassembled to recycle usable parts; for electronic office equipment like laptops, employees can apply forbuyback and personal reuse after a certain period of use; and hard drives are demagnetized and damaged toproduce recyclable crushed particles.
4. Packaging Management
The Company continues to promote green packaging, reducing the use of polluting packaging materials andincreasing the use of green packaging materials through various arrangements. Green and environment-friendlypackaging products are procured and applied more extensively, with only green and recyclable materials used forboth internal and external logistics packaging.
5. Noise Management
The Company places importance on maintaining a quiet and peaceful environment in office areas andeffectively implements noise control measures. Power distribution rooms and pump rooms are independentlylocated in dedicated equipment rooms, and important facilities and equipment are equipped with vibrationreduction devices or undergo technical upgrades.Measures taken to reduce carbon emissions during this reporting period and their effects?Applicable □Not applicable
iFLYTEK's Board of Directors has established a dedicated ESG committee to oversee ESG-relatedmatters, including risks and opportunities related to climate change and carbon neutrality actions. Under theguidance of the Board's ESG committee, iFLYTEK has established the following climate change responseframework:
iFLYTEK’s Climate Change Response Framework
| Governance | The Board's ESG Committee is responsible for overseeing ESG-related matters, including risks and opportunities associated with climate change and carbon neutrality actions. | |||||
| Strategy | Conducting quantitative analysis and assessment of climate change risks and opportunities, and customizing climate risk response methods | Policy and Regulatory Risks | Implementing carbon emission control policies, etc. | Promoting the efficient use of clean and low-carbon energy sources; promoting the R&D and application of new technologies and materials | ||
| Technological Risks | Technology innovations to lower emissions | |||||
| Market Risks | Market preference for low-carbon products | |||||
| Reputational Risks | Public preference for green technologies | |||||
| Emergent Physical Risks | Typhoons, floods, etc. | |||||
| Chronic Physical Risks | Changes in precipitation, rising average temperatures, etc. | |||||
| Risk Management | Identifying climate risks and opportunities related to the Company, incorporate climate risk management into the Company's risk assessment and management system, and developing measures for managing key risks and opportunities. | |||||
| Metrics and Targets | Carbon Emissions | Total greenhouse gas emissions | Promoting carbon neutrality | |||
| Energy | Total energy consumption | Promoting the procurement of green electricity | ||||
| Wastes | Waste disposal volume | Reducing waste per unit of revenue year by year | ||||
iFLYTEK considers environmental technology innovation in response to climate change as one of the keystrategic goals of its ESG framework. Recognizing the significant role that artificial intelligence and big dataplay in areas such as carbon reduction, carbon monitoring, green finance, and carbon emission trading,iFLYTEK is actively increasing its investment in environmental technologies. Leveraging its proprietary, world-leading AI technologies, iFLYTEK is committed to promoting the application of environmental technology andassisting in reducing environmental pollution and stress. The Company's efforts are aimed at using AI to supportlow-carbon and eco-friendly initiatives.
1. Green Innovation Investment and Optimization of IDC Carbon Emissions
iFLYTEK's data center actively aligns with the national dual-carbon goals and aims to set regionalbenchmark for green data centers. By optimizing the energy structure, applying low-carbon technologies, andimplementing energy efficiency management, carbon emissions are significantly reduced.
1) Optimization of energy structure
Purchasing and using green electricity is the most important and direct method to reduce carbon emissions.The purchase of green electricity offsets carbon emissions. Starting from April 2024, iFLYTEK has includedrenewable energy in the power supply of its B3 data center, utilizing renewable green energy sources such aswind and photovoltaic power to optimize the energy structure. By May, the proportion of green electricity hasreached 90%.
iFLYTEK's Green Electricity Transaction Certificate
2) Application of low-carbon technologies
? High-efficiency power supply and distribution products: The 10KV AC input DC uninterruptible power
supply system called "Panama power architecture" is the first of its kind to be applied in Anhui Province;? High-efficiency refrigeration/cooling products: They include magnetic levitation phase change cooling (the
first of its kind to be applied in Anhui Province), fluorine pump multi-loop natural cooling technology and
units, water thermal storage technology, and natural plate heat exchangers;? AI intelligent group control system: Using reinforced learning algorithms, the control system will select the
optimal number of cooling water pumps and cooling towers, and frequency control strategy based on the
current chiller load and current climate conditions. This reduces the power consumption of the HVAC
system and also optimizes its operation, improving the health of the air conditioning system operation.
3) Energy efficiency management
At the corporate policy level, the Company has established Measures for Energy and ResourceConservation Management, aiming to scientifically and reasonably enhance the efficiency of energy and resourceutilization, and promote the conservation and recycling of energy and resources. Clear provisions are made onthe division of responsibilities among various departments and the rules of work.
At the departmental policy level, the Company's data center has formulated: a. the Green Procurement Rules,which encompasses environmental protection, resource conservation, safety and health, recycling, low carbon,and recycling, and encourages the procurement and use of energy-saving, water-saving, and environment-friendly materials. The data center's green procurement rules contain well-defined procurement standards; b. theEnergy Consumption Rules, which ensures the rational planning and use of electricity, cooling, and water
consumption in the data center, and dictates the statistics and analysis of energy consumption, the establishmentof energy-efficiency task teams, and the implementation of equipment energy-efficiency methods; c. the WasteMaterial Recycling and Scrap Disposal Rules, which aims at rational use of material resources, aligns with thenational carbon peaking and carbon neutrality initiative, improves the green supply chain management system,manages the full-life-cycle carbon emissions, and clearly stipulates the waste material management methods andclassification at the data center.
2. Scientific Utilization of Resources and Commitment to Environment Friendliness
iFLYTEK takes green development its path towards a sustainable future, paying close attention to theecological impact of its operations and value chain. Guided by its commitment to being "green, low-carbon, andrecycling," the Company adopts vigorous methods to control pollution emissions, and advocates green conceptsas part of its corporate culture. It follows a multi-faceted approach encompassing infrastructure building,operation and daily life management, campus environment governance, and resource conservation and utilization.iFLYTEK strictly implements relevant national and industry regulations, insisting on the alignment between theCompany's own development and the protection of the environment.
1) Advocating green office practices
iFLYTEK actively scales up its investment in green office practices, forming a work style that is energy-efficient, environment-friendly, economical, and healthy. The Company has improved its OA system andiFLYREC online meeting systems, promoting "intelligent paperless office" in certain scenarios. By advancingdigital management, it has deployed intelligent AI applications in multiple scenarios such as "AI+Office”,“AI+Recruitment”, “AI+Finance”, “AI+Campus," enhancing efficiency and aiding energy saving and emissionsreduction. The Company places special emphasis on investment in energy efficiency, emissions reduction, andgreening in the daily operation and living environment. The Company take all possible measures to ensureenergy conservation and consumption reduction during equipment use, scientifically and reasonably improvingthe efficiency of energy and resource utilization, and promoting the conservation and recycling of energy andresources.
2) Incentivizing carbon reducing behaviors
To encourage its employees to reduce travel by fossil fuel vehicles, iFLYTEK has developed an internalcarpooling software called "AI Pool." It organizes employees driving private cars to pick up colleagues on theirway to and from work. On one hand, this policy provides free ride services for employees, and on the other handoffers vehicle maintenance, car washing services, and subsidies for car owners. Currently, AI Pool has covered19 cities including Hefei, Wuhu, Qingdao, and Guangzhou, serving about 2,000 passengers per day, equivalentto a daily reduction of 2,000 vehicles on the road.
To encourage its employees to use alternative-fuel vehicles, the Company has installed AC and DCcharging piles (with two charging guns per pile) at its headquarters campus for employees to charge theirvehicles. It also provides charging subsidies for employees who drive electric cars to workplaces, with a subsidyof 1 RMB yuan/kilometer.
The Company strongly advocates green commuting, providing support for employees' commuting needs bysetting up 30 regular bus routes, shuttles to and from subway stations, and evening buses. The Companyencourages employees to use public transportation or alternative fuel vehicles more often in daily living. TheCompany also advocates the "135" green travel mode, which stands for “walking within 1 kilometer”, “cyclingwithin 3 kilometers”, and “taking public transportation within 5 kilometers”, which urges its employees to "walkif they can, cycle if they can't walk, take public transport if they can't cycle, and drive only when necessary." Itencourages its employees to adopt healthy and environment-friendly travel methods and to be practitioners of
green travel.
3) Strengthening environmental supervision
The Company has established rules and regulations such as the Procedures Concerning Nonconformity,Corrective Actions, and Preventive Measures and the Objectives, Targets, Management Plan and ControlProcedures for inspecting, assessing, and controlling the environmental performance of each businessunit/department, providing a framework for environmental protection.The Company monitors the consumption of water and electricity on a weekly basis, supplemented byirregular spot checks, to strengthen the awareness of resource conservation and environmental protection amongits employees and business units/departments.
The Company urges suppliers to fulfill their energy responsibilities, integrates supplier energy usage into itsassessment framework, and generates weekly reports from data analysis to identify any irregularities. It alsocontinuously optimizes working rules and establishes a mechanism for evaluating results.
4) Energy-efficiency measures
iFLYTEK has formulated the Measures for Energy and Resource Conservation Management and theImplementation Plan for Enhancing Energy Efficiency and Consumption Control, working to reduce theecological impact of its operations and value chain. It implements energy-saving measures in every aspect of itsoperations, exploring an economic model that supports the carbon peaking and carbon neutrality goals of China.
Saving Water and Electricity: The Company uses energy-efficient lighting products in office spaces;optimizes lighting circuits, increases area control, strengthens patrols of unoccupied office areas after work toturn off unnecessary lighting, in order to save electricity. It selects water-saving fixtures to realize waterconservation. During holidays, it partially suspends the use of elevators, water heaters, etc., to reduce energyconsumption.
Saving Energy: The Company strengthens the management of energy consumption. It enhances the dailyinspection and maintenance of energy pipelines to eliminate leaks, optimizes the efficiency of equipmentoperation, and ensures safety. The Company opts for economical routes and carpool for traveling.
Saving Paper. The Company advocates paperless office practices and the use of paper certified by theForest Stewardship Council (FSC). It advocates paper recycling, prioritizes double-sided printing and black-and-white printing, and reduces the use of toner cartridges. Except for special requirements for office paper that mustbe single-sided, all others are double-sided or distributed in electronic format to reduce paper consumption.
Air Conditioning: The Company strengthens the management over the use of air conditioning, turning onair conditioning when the temperature is higher than 30℃ in summer, with a centralized control setting of 26℃-30℃; in winter, air conditioning is turned on when the temperature is below 10℃, with a centralized controlsetting of 19℃-22℃. On weekdays, air conditioning is centrally turned off at 17:45, 20:00, and every two hoursafter 20:00, while on weekends, an additional centralized turn-off is added at 11:00 and 15:00.
Elevators: The Company distinguishes working hours and areas, and sets the operation time and thenumber of available elevators according to the peak and valley periods of use. During holidays, it suspends theuse of elevators and other equipment to reduce energy consumption.
3. Green Industry Applications
iFLYTEK supports “carbon peaking and carbon neutrality" goals in various industry sectors, using artificialintelligence to facilitate the creation of green industry applications. iFLYTEK works together with relevantresearch institutions to create innovative industry applications for various scenarios where carbon peaking andcarbon neutrality are mandated, including Nankai University, the Institute of Computing Technology of theChinese Academy of Sciences, and Northeastern University.
Based on perceptual and cognitive intelligence, iFLYTEK has built an energy efficiency control system andvarious predictive models, creating an AI energy-saving “super brain” solution with integrated software andhardware that effectively improves energy efficiency and reduces operational and maintenance costs. Forexample, iFLYTEK has helped telecom operators achieve energy conservation and emissions reduction in basestation machine rooms, which has been promoted in multiple provinces.Based on the urban platform and digital infrastructure, iFLYTEK actively explores methods for carbonemission assessment, detection, and analysis, as well as decision support models, and provides low-carbonplanning and optimization solutions for urban managers, supporting the green and low-carbon development ofcities. For instance, targeting the typical scenario of vehicle exhaust emissions (according to estimates by theChina Automotive Technology and Research Center, automotive carbon emissions account for more than 80% ofcarbon emissions in China's transportation sector and about 7.5% of China’s total carbon emissions), iFLYTEK's"Transportation Super Brain" solution uses AI to learn from traffic data, empowering urban traffic managementand the translation of data into smart decisions. Taking the Transportation Super Brain of Hefei for example. Byfully integrating traffic data into the monitoring platform, the “super brain” recognizes traffic junctions and roadsections, gives real-time congestion alerts, and digs out frequent congestion points, providing scientific datasupport for traffic administration, effectively improving traffic efficiency, and helping reduce carbon emissions.To promote the development and application of environment solutions, the iFLYTEK Open Platform has setup a section dedicated to smart environment protection (https://www.xfyun.cn/industry/ai-ep). The platform hasproduced more than ten industry solutions such as intelligent environment and meteorological monitoring,intelligent environmental protection, and intelligent waste sorting solutions, fully empowering smartenvironmental protection, allowing urban developers to use iFLYTEK’s AI capabilities more conveniently inscenarios such as pollution monitoring and waste recycling and classification.
4. Climate Change Response
iFLYTEK pays close attention to the impact of global climate change, engages in actions to address it, andcreates exemplary carbon-neutral applications.
iFLYTEK's Artificial Intelligence R&D and Production Base is creating a model of green building:
Approaching from an urban design perspective, it proposes the "Park X" concept and the "Campus X" spatialstructure, shaping a brand-new office space layout, and transforming the entire headquarters campus into anecologically harmonious “park." Meanwhile, it maintains the ecology-friendliness of the buildings themselves byadding solar photovoltaic panels, continuous terraces covered with green plants, and rooftop gardens, making theoffice space into a real “park” by ensuring exposure to sunlight and natural harmony.
The Company adheres to the principles of "greenness and energy efficiency" in the development of thecampus. Utilizing large language model capabilities for operation and maintenance strategy recommendation inbuilding design and construction, the Company intelligently generates operation and maintenance plans andmonitors the status of various equipment in real-time. When employees leave office areas or meeting rooms arevacant, the system will recognize and automatically perform actions such as turning off lights and airconditioning, intelligently reducing energy consumption. At the same time, in various corners of the campus,photovoltaic power generation equipment is also quietly collecting clean energy. The integration of green energyand office energy-saving measures makes the park a truly "green" space. After selection and recommendation,and expert review, it has successfully been included as a 2023 Anhui Province Smart Construction Pilot Project.
II.Fulfillment of Social Responsibilities
As a leading AI company in China, iFLYTEK is committed to building a better world with AI, and fulfillssocial responsibilities to advance social progress as well as AI technology and industry development. In the firsthalf of 2024, the Company's main efforts to fulfill its social responsibilities, especially regarding povertyalleviation and rural revitalization, are as follows:
1. “AI for Inclusive Education” Initiative to Reinforce Rural Education
iFLYTEK has extended AI applications to rural schools, aiming to uplift the quality of education inunderprivileged areas and promote equal access to high-quality educational resources. This initiative addressesthe critical need for educational equity, covering the "last mile" of compulsory education.
As the foundation of China's education system, the development of small rural schools is essential forensuring access to quality education for all, especially in remote areas. Given the current distribution challengesof excellent teachers, iFLYTEK focuses on improving educational quality in rural schools with limited resourcesby using technology to enhance the availability of high-quality educational materials and to encourage thesharing of these resources between urban and rural schools.
In this context, iFLYTEK has launched the AI for Inclusive Education initiative, which aims to break thecycle of poverty by providing support at the root. The initiative brings AI technology to rural schools, offeringeducational tools, toys, curricula, teacher training, and volunteer teaching services. This enables children in lessdeveloped areas to access advanced educational resources and to benefit from technological progress. Since itslaunch in 2017, the initiative has been implemented in over 1,000 schools nationwide, offering AI-based teachingsolutions to innumerable teachers and students.
In April 2024, under the “AI for Inclusive Education” initiative, iFLYTEK donated an AI+Mental Healthsystem and equipment and a data-driven customized teaching system to Tonghua No.1 Middle School in JilinProvince. This included a smart mental health platform, an AI psychological companion, an AI counseling room,and data display screens as part of the smart education solution. In July, in collaboration with China Women'sDevelopment Foundation, the initiative was extended to Neihuang County, Anyang City, Henan Province, whereiFLYTEK’s AI learning devices were donated to primary school students, allowing them to experiencepersonalized learning through AI.
2. Exploring New Paths for Industrial Development to Boost Rural Industry Revitalization
iFLYTEK assists in enhancing local forestry infrastructure, supporting rural tourism projects, and backinginfrastructure development in backward “revolutionary base areas” to increase local employmentopportunities and enhance the industrial development momentum, thereby boosting rural revitalization.
In July 2021, iFLYTEK entered into a donation agreement with Jing County, a revolutionary base area,committing 10 million RMB yuan for ecological conservation and rural revitalization efforts in Xiaokang Village,Caicheng Town of the county. The initiative prioritized the ecological protection of Moso bamboo and thegrowth of "forest floor" industries. As a result, all 25 eligible forest roads in Caicheng Town were constructedand expanded to a total length of about 21.1 kilometers, through an investment of approximately 1.05 millionRMB yuan. This infrastructure facilitated the transportation of around 18,050 tons of Moso bamboo, leading tosales revenue of approximately 9.3 million RMB yuan. The road development also reduced the cost of harvestingMoso bamboo by 14-18 RMB yuan per 100 kilograms, which translated to a net income increase of over 2.8million RMB yuan for more than 900 forestry families.
Since the initiative's inception, iFLYTEK has supported Caicheng Town by establishing a bamboo forest
camping site in Xiaokang Village equipped with beach vehicles, go-karts, and a horse-riding field. This projecthas provided employment for over 20 villagers and has brought an annual revenue of about 1 million RMB yuanto the village. Moreover, iFLYTEK has been instrumental in fostering local industrial development. Inspired bythe traditional Dragon Boat Festival, the Company has processed Moso bamboo through 11 steps to producecultural and creative artifacts, thereby creating additional employment and income opportunities for the localpeople.
3. Sound Horizons: The iFLYTEK Hearing Inclusion Project
iFLYTEK utilizes AI to assist individuals with hearing impairments in better integrating into society,harnessing the power of technology to serve more people in need, and promoting the creation of a more inclusiveand friendly social environment for the hearing-impaired.
In February 2024, iFLYTEK Medical collaborated with the Audiology Development Foundation of Chinaand the producing company of the film Article 20 to initiate the "Sound Horizons: The iFLYTEK HearingInclusion Project." On the occasion of the 25th International Ear Care Day on March 3, the project delivered asignificant public welfare event in Beijing, where iFLYTEK Medical, together with the Audiology DevelopmentFoundation, demonstrated their commitment to the hearing-impaired. This event included a donation ceremonyfor iFLYTEK’s smart hearing aid, through which 1,000 hearing-impaired individuals, with priority given tothose from financially disadvantaged backgrounds, received the aids. These AI-enhanced hearing aids aredesigned to remove communication barriers, enabling recipients to hear the world's sounds. The project's impactextended online, engaging nearly 100,000 netizens in advocacy efforts for the hearing-impaired.
Section VI Significant Events
I. Commitments by the Company's de facto controller, shareholders, related parties, andacquirers, as well as the company itself, that were fulfilled during this reporting period orremained unfulfilled as of the end of this reporting period?Applicable □Not applicable
| Commitment | Made by | Type | Content | Time | Duration | Performance |
| Commitment made in the acquisition report or Statement of Changes in Owners' Equity | 1. The Company's de facto controllers (Liu Qingfeng and USTC Holdings Co., Ltd.) | Commitment by the de facto controller | Avoiding competition within the same industry, regulating related-party transactions, and preventing the misuse of funds; ensuring the independence of the listed company | November 20, 2014 | Period of acting in concert | Ongoing |
| 2. Yang Jun, Wang Binbin, Xu Guiqin & Zhu Peng | Other commitments | Commitment to avoiding competition within the same industry, and commitments to reducing and regulating related-party transactions, etc. | December 9, 2016 | Period of being a shareholder of the listed company | Ongoing | |
| 3. Beijing Le Jiao Rong Zhi Investment Development Partnership Company (Limited Partnership), Beijing Jia Hui Jin Yuan Investment Development Partnership Company (Limited Partnership) & Zhang Shaohua | Other commitments | Commitment to avoiding competition within the same industry, and commitments to reducing and regulating related-party transactions, etc. | December 9, 2016 | Period of being a shareholder of the listed company | Completed | |
| Commitment made at IPO or refinancing | 1. Liu Qingfeng, the Company's de facto controller | Commitment at IPO | 1. During my tenure at iFLYTEK, I will not transfer more than twenty-five percent of the total shares I hold in iFLYTEK in any given year. Furthermore, should I resign from iFLYTEK, I pledge not to transfer any shares of iFLYTEK that I hold within six months following my resignation. 2. 3. While I hold shares in iFLYTEK, I will not engage in any business that competes with or is similar to iFLYTEK's operations. I will not directly invest in or | April 24, 2008 | Period of acting as a de facto controller | Ongoing |
| acquire any enterprise or project that competes with or is similar to iFLYTEK's business, nor will I provide any form of assistance to competitors. In the event that I become involved in any competition with iFLYTEK, regardless of the circumstances, I will actively implement effective measures to relinquish such competitive activities. 4. | ||||||
| 2. Ningbo Saite Equity Investment Partnership Enterprise | Other commitments | Commitment to avoiding competition within the same industry, and commitments to reducing and regulating related-party transactions, etc. | March 17, 2017 | Period of being a shareholder of the listed company | Ongoing | |
| 3.Nanjing Chuangyi Investment Management Center (Limited Partnership) | Other commitments | Commitment to avoiding competition within the same industry, and commitments to reducing and regulating related-party transactions, etc. | March 17, 2017 | Period of being a shareholder of the listed company | Completed | |
| Stock incentive commitment | The Company and rewardees | Other commitments | The Company pledges not to provide any financial assistance, including loans or guarantees, to the incentive recipients for obtaining stock options or restricted shares under this plan. The recipients pledge to return all benefits received from this plan to the Company if it is determined that the Company's eligibility to grant or exercise these rights is invalidated due to false statements, misleading information, or significant omissions in the disclosed documents. | August 26, 2021 | Period of implementing the stock incentive plan | Ongoing |
| Has the commitment been performed in time? | Yes | |||||
| If the commitment is not fulfilled by the deadline, provide a detailed explanation of the reasons for the incomplete fulfillment and outline the subsequent work plan | Not applicable | |||||
II. Non-operating Fund Occupancy by the Controlling Shareholder and Other RelatedParties of the Listed Company
□Applicable ?Not applicable
There were no instances of non-operating fund occupancy by the controlling shareholder or other related partiesregarding the listed company during this reporting period.III. Non-compliant External Guarantees
□Applicable ?Not applicable
There were no instances of non-compliant external guarantees during this reporting period.IV. Appointment and Dismissal of Accounting FirmHas the semi-annual financial statement been audited?? Yes ? NoThe Company's semi-annual statement has not been audited.
V. Explanation by the Board of Directors and the Board of Supervisors, if any, regarding thenon-standard audit report issued by the accounting firm for the first half of 2024
□Applicable ?Not applicable
VI. The Board of Directors' Explanation to the Non-standard Audit Report for Year 2023
□Applicable ?Not applicable
VII. Bankruptcy Reorganization
□Applicable ?Not applicable
The Company did not undergo any bankruptcy reorganization proceedings during the reporting period.
VIII. Legal Proceedings
Material Legal and Arbitration Proceedings
□Applicable ?Not applicable
During H1 2024, the Company did not undergo any significant litigation or arbitration proceedings.Other Litigation Proceedings
□Applicable ?Not applicable
IX. Penalties and Rectifications
□Applicable ?Not applicable
The Company did not incur any penalties or undertake any rectifications during this reporting period.
X. Integrity Issue of the Company and Its Controlling Shareholder and De Facto Controller
□Applicable ?Not applicable
XI. Significant Related-Party Transactions
1. Related-party Transactions Related to Day-to-day Operations
?Applicable □Not applicable
| Related party | Relationship | Type of Related-Party Transaction | Content of Related-Party Transaction | Pricing Principle of Related-Party Transaction | Transaction Price | Transaction Amount (in ten thousand RMB yuan) | Percentage of Total Similar Transactions | Approved Transaction Limit (in ten thousand RMB) yuan） | Exceeding the Approved Limit | Settlement Method of Related-Party Transaction | Available Market Price for Similar Transactions | Date of disclosure | Index to disclosure |
| China Mobile Limited and its subsidiaries | Investor with significant influence on the Company | Routine Related-Party Transactions | Sale of goods and provision of services | Market price | N/A | 51,347.45 | 5.51% | 150,000 | No | Bank transfer | No | April 23, 2024 | The Announcement on Anticipated General Related-Party Transactions in 2024(Announcement No.: 2024-018) published on the Securities Times, the China Securities Journal, the Shanghai Securities News, the Securities Daily and CNINFO (www.cninfo.com.cn) |
| China Mobile Limited and its subsidiaries | Investor with significant influence on the Company | Routine Related-Party Transactions | Sale of goods and provision of services | Market price | N/A | 3,781.23 | 0.81% | 15,000 | No | Bank transfer | No | April 23, 2024 | |
| Total | -- | -- | 55,128.68 | -- | 165,000 | -- | -- | -- | -- | -- | |||
| Details of Large-Value Goods Returns | Not applicable | ||||||||||||
| Actual performance of the estimated total routine related-party transactions by category, if any, during this reporting period | For the fiscal year 2024, it is estimated that routine related-party transactions involving the "Sale of goods and provision of services" with China Mobile Communications Co., Ltd. and its subsidiaries China Mobile Limited will amount to 150,000.00 million RMB yuan, with an actual transaction amount of 51,347.45 million yuan occurring from January to June 2024. Additionally, it is estimated that routine related-party transactions involving the "Purchase of goods and acceptance of services" will amount to 15,000.00 RMB million yuan, with an actual transaction amount of 3,781.23 million RMB yuan occurring during the same period. In summary, the total estimated amount for routine related-party transactions with China Mobile Communications Co., Ltd. and its subsidiaries for 2024 is 165,000.00 | ||||||||||||
| million RMB yuan, with an actual total transaction amount of 55,128.68 million RMB yuan from January to June 2024, which does not exceed the total estimated transaction amount for the year. | |
| Reasons for significant differences between the transaction price and the market reference price, if applicable | Not applicable |
2. Related-party Transactions Arising from Acquisition or Sales of Assets or Equity
□Applicable ?Not applicable
The Company did not engage in any related-party transactions arising from acquisition or sales of assets orequity during this reporting period.
3. Related-party Transactions for Joint External Investment
□Applicable ?Not applicable
The Company did not conduct any related-party transactions for joint external investment during this reportingperiod.
4. Related Creditor's Rights and Debts
□Applicable ?Not applicable
The Company did not incur any related creditor's rights and debts during this reporting period.
5. Transactions with Related Finance Companies
□Applicable ?Not applicable
The Company did not conduct any deposit, loan, credit or other financial business with any related financecompany or such finance company's related parties.
6. Transactions Between Finance Companies Controlled by the Company and Their RelatedParties
□Applicable ?Not applicable
None of the finance companies controlled by the Company conducted any deposit, loan, credit or other financialbusiness with their related parties.
7. Other Material Related-party Transactions
□Applicable ?Not applicable
The Company did not engage in other material related-party transactions during this reporting period.
XII. Major Contracts and Their Performance
1. Trust, Sub-contract and Lease
1) Trust
□Applicable ?Not applicable
The Company did not engage in any trust arrangements during this reporting period.
2) Sub-contract
□Applicable ?Not applicable
The Company did not enter into any contracting agreements during this reporting period.
3) Lease
□Applicable ?Not applicable
The Company did not enter into any leasing agreements during this reporting period.
2. Material Guarantees
?Applicable □Not applicable
Currency amounts in ten thousand RMB yuan
| External guarantees provided by the Company and its subsidiaries (excluding those to subsidiaries) | ||||||||||
| Name of the Guarantee Recipient | Guarantee Amount Disclosure Date | Guarantee Amount | Date of Actual Occurrence | Actual Guarantee Amount Provided | Type of Guarantee | Collateral (if any) | Counter-guarantee (if any) | Guarantee Period | Fulfilled or Not | Related Party Guarantee or Not |
| Financial leasing customer | October 25, 2019; April 23, 2024 | 50,000 | June 19, 2020; December 29, 2020; December 30, 2020; November 30, 2021 | 1,236.07 | Joint and several liability guarantee | All financial leasing customers provided counter guarantee | Twelve months from the date of approval by the Board of Directors | No | No | |
| Tongling Tianyuan Equity Investment Group Corporation | April 19, 2019 | 24,000 | June 14, 2019; March 22, 2021 | 10,000 | Joint and several liability guarantee | Tongling Development Investment Group Corporation provided counter guarantee | From the date of approval by the Board of Directors to the expiration of the project's loan term | No | No | |
| Ma'anshan Big Data Asset Operation Co., Ltd. | April 23, 2024 | 17,160 | Twelve subsequent months | No | No | |||||
| Total amount of approved external guarantees during this reporting period (A1) | 91,160 | Total amount of external guarantees actually provided during this reporting period (A2) | 0 | |||||||
| Total amount of approved external guarantees as at the end of the reporting period (A3) | 91,160 | Total amount of the outstanding external guarantees actually provided as at the end of the reporting period (A4) | 11,236.07 | |||||||
| Guarantees provided by the Company to its subsidiaries | ||||||||||
| Name of the Guarantee Recipient | Guarantee Amount Disclosure Date | Guarantee Amount | Date of Actual Occurrence | Actual Guarantee Amount Provided | Type of Guarantee | Collateral (if any) | Counter-guarantee (if any) | Guarantee Period | Fulfilled or Not | Related Party Guarantee or Not |
| IFLYTEK | April | 30,000 | General | Twelve | No | No | ||||
| (International) Limited | 23, 2024 | guarantee; joint and severable liability guarantee | subsequent months | |||||||
| iFLYTEK (Beijing) Technology Co., Ltd. | April 23, 2024 | 10,000 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||||
| Shenzhen iFLYTEK Interactive Electronics Co., Ltd. | April 23, 2024 | 5,000 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||||
| iFLYTEK (Shanghai) Technology Co., Ltd. | April 23, 2024 | 15,000 | March 29, 2024 | 47 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||
| Anhui Jixun Information Technology Co., Ltd. | April 23, 2024 | 12,000 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||||
| Hefei iFLYTEK Doxent Technology Co., Ltd. | April 23, 2024 | 20,000 | September 27, 2023 | 6,629.31 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||
| Anhui Institute of Information Technology | April 23, 2024 | 40,000 | May 17, 2022 | 5,860 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||
| Anhui Institute of Information Technology | April 23, 2024 | March 22, 2024 | 2,545.82 | General guarantee; joint and | Twelve subsequent months | No | No |
| severable liability guarantee | ||||||||||
| Anhui Institute of Information Technology | April 23, 2024 | July 5, 2023 | 7,000 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | |||
| Anhui Tingjian Technology Co., Ltd. | April 23, 2024 | 15,000 | September 27, 2023 | 7,806.15 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||
| Anhui Zhixue Technology Co., Ltd. | April 23, 2024 | 15,000 | September 27, 2023 | 1,599.28 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||
| Jiangsu Yixing Automobile Technology Co., Ltd. | April 23, 2024 | 15,000 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||||
| Tianjin iFLYTEK Jizhi Technology Co., Ltd. | April 23, 2024 | 20,000 | December 27, 2023 | 3,363.65 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||
| iFLYTEK (Suzhou) Technology Co., Ltd. | April 23, 2024 | 45,000 | November 10, 2023 | 2,772.95 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||
| iFLYTEK (Shanghai) Technology Co., Ltd. | April 23, 2024 | November 14, 2023 | 1,009.92 | General guarantee; joint and severable liability | Twelve subsequent months | No | No |
| guarantee | ||||||||||
| Zhejiang iFLYTEK Intelligent Technology Co., Ltd. | April 23, 2024 | 3,000 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||||
| Hainan Shenggu Technology Co., Ltd. | April 23, 2024 | 22,000 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||||
| Anhui iFLYTEK Jiecheng Software Technology Co., Ltd. | April 23, 2024 | 70,000 | July 20, 2023 | 8,380.94 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||
| Anhui iFLYTEK Jiecheng Software Technology Co., Ltd. | April 23, 2024 | August 25, 2023 | 7,203.9 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | |||
| Anhui Kexun Jinse Technology Co., Ltd. | April 23, 2024 | 15,000 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||||
| Anhui iFLYTEK New Retail Co., Ltd. | April 23, 2024 | 5,000 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||||
| Shandong Kexun Information Technology Co., Ltd. | April 23, 2024 | 5,000 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||||
| Anhui | April | 5,000 | General | Twelve | No | No |
| Wanchuang New Smart Technology Co., Ltd. | 23, 2024 | guarantee; joint and severable liability guarantee | subsequent months | |||||||
| Anhui Yunshu Smart Technology Co., Ltd. | April 23, 2024 | 10,000 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||||
| Consolidated subsidiaries sharing the bill pool business | April 23, 2024 | 100,000 | July 7, 2023 | 28,941.42 | General guarantee; joint and severable liability guarantee | Twelve subsequent months | No | No | ||
| Total amount of approved guarantees provided to subsidiaries during this reporting period (B1) | 477,000 | Total occurrence amount of guarantees provided to subsidiaries during this reporting period (B2) | 80,320.92 | |||||||
| Total amount of approved guarantees provided to subsidiaries as at the end of the reporting period (B3) | 477,000 | Total amount of the outstanding guarantees actually provided to subsidiaries as at the end of the reporting period (B4) | 83,160.34 | |||||||
| Guarantees provided by the subsidiaries to other subsidiaries | ||||||||||
| Name of the Guarantee Recipient | Guarantee Amount Disclosure Date | Guarantee Amount | Date of Actual Occurrence | Actual Guarantee Amount Provided | Type of Guarantee | Collateral (if any) | Counter-guarantee (if any) | Guarantee Period | Fulfilled or Not | Related Party Guarantee or Not |
| Anhui Imaging Union Cloud Medical Technology Co., Ltd. | April 23, 2024 | 5,000 | August 16, 2023 | 333.83 | General guarantee; joint and several liability guarantee | Twelve subsequent months | No | No | ||
| Anhui Imaging Union Cloud Medical Technology Co., Ltd. | April 23, 2024 | July 3, 2023 | 500 | General guarantee; joint and several liability guarantee | Counter-guarantee provided by iFLYTEK Medical | Twelve subsequent months | No | No | ||
| Anhui Imaging | April 23, 2024 | December 26, | 500 | General guarante | Twelve subseque | No | No | |||
| Union Cloud Medical Technology Co., Ltd. | 2023 | e; joint and several liability guarantee | nt months | |||||||
| Anhui Imaging Union Cloud Medical Technology Co., Ltd. | April 23, 2024 | December 4, 2023 | 500 | General guarantee; joint and several liability guarantee | Twelve subsequent months | No | No | |||
| Lvliang iFLYTEK Healthcare Information Technology Co., Ltd. | April 23, 2024 | 1,000 | November 15, 2023 | 25.6 | General guarantee; joint and several liability guarantee | Twelve subsequent months | No | No | ||
| Pu'er iFLYTEK Information Technology Co., Ltd. | April 23, 2024 | 1,000 | General guarantee; joint and several liability guarantee | Twelve subsequent months | No | No | ||||
| Beijing Hui Ji Zhi Medical Technology Co., Ltd. | April 23, 2024 | 1,000 | June 19, 2024 | 5.24 | General guarantee; joint and several liability guarantee | Twelve subsequent months | No | No | ||
| Shanghai iFLYTEK Medical Technology Co., Ltd. | April 23, 2024 | 500 | General guarantee; joint and several liability guarantee | Twelve subsequent months | No | No | ||||
| Yinchuan iFLYTEK Internet Hospital Co., Ltd. | April 23, 2024 | 500 | General guarantee; joint and several liability guarantee | Twelve subsequent months | No | No | ||||
| Total approved guarantee limit for subsidiaries during this reporting period (C1) | 9,000 | Total actual guarantee provided to subsidiaries during this reporting period (C2) | 1,030.84 | |||||||
| Total approved guarantee limit for subsidiaries as at the end of this reporting period (C3) | 9,000 | Total outstanding guarantee balance for subsidiaries as at the end of this reporting period | 1,864.67 | |||||||
| (C4) | |||
| Total guarantees (the sum of the three items above) | |||
| Total amount of approved guarantees during this reporting period (A1+B1+C1) | 577,160 | Total amount of guarantees actually provided during this reporting period （A2+B2+C2） | 81,351.76 |
| Total amount of approved guarantees as at the end of this reporting period (A3+B3+C3) | 577,160 | Total amount of the outstanding guarantees actually provided as at the end of this reporting period (A4+B4+C4) | 96,261.08 |
| Percentage of the total amount of actual guarantees (A4+B4+C4) in the Company's net assets | 5.78% | ||
| In Which： | |||
3. Entrusting Cash Asset Management to Others
□Applicable ?Not applicable
The Company did not entrust any cash asset management to others during this reporting period.
4. Other Major Contracts
□Applicable ?Not applicable
The Company did not enter into any other significant contracts during this reporting period.XIII. Explanation of Other Significant Matters
□Applicable ?Not applicable
There are no other significant matters requiring explanation during this reporting period.XIV. Significant Events of the Company's Subsidiaries
□Applicable ?Not applicable
Section VII Changes in Shares and Shareholder Information
I. Changes in Shares
1. Overview
| Before the change | Change (increase/decrease) | After the change | |||||||
| Shares | Percentage | New shares issued | Bonus shares | Shares transferred from capital reserve | Other shares | Subtotal | Shares | Percentage | |
| I. Shares subject to selling restrictions | 161,138,842 | 6.96% | -33,890,543 | -33,890,543 | 127,248,299 | 5.50% | |||
| 1. State-held shares | 0 | ||||||||
| 2. Shares held by state-owned legal persons | 0 | ||||||||
| 3. Shares held by other domestic investors | 161,138,842 | 6.96% | -33,890,543 | -33,890,543 | 127,248,299 | 5.50% | |||
| In which: shares held by domestic legal persons | 0 | 0.00% | 0 | 0 | 0.00% | ||||
| Shares held by domestic natural persons | 161,138,842 | 6.96% | -33,890,543 | -33,890,543 | 127,248,299 | 5.50% | |||
| 4. Shares held by foreign investors | 0 | 0.00% | 0 | 0 | 0.00% | ||||
| In which: shares held by foreign legal persons | |||||||||
| Shares held by foreign natural persons | 0 | 0.00% | 0 | 0 | 0.00% | ||||
| II. Shares not subject to selling restrictions | 2,154,550,311 | 93.04% | 29,935,575 | 29,935,575 | 2,184,485,886 | 94.50% | |||
| 1. RMB-denominated ordinary shares | 2,154,550,311 | 93.04% | 29,935,575 | 29,935,575 | 2,184,485,886 | 94.50% | |||
| 2. Domestically listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Others | |||||||||
| III. Total number of shares | 2,315,689,153 | 100.00% | -3,954,968 | -3,954,968 | 2,311,734,185 | 100.00% | |||
Reasons for changes in shares?Applicable □Not applicableThe share change is due to the automatic adjustment to the locked-up shares of senior management members atthe beginning of each year and the repurchase and cancellation of part of the restricted stocks already granted, etc.
Approval of share changes?Applicable □Not applicable
The Company's sixth Board of Directors' seventh meeting and the sixth Board of Supervisors' seventhmeeting held on April 21, 2024, and the 2023 Annual General Meeting of Shareholders held on May 13, 2024reviewed and passed the Proposal on the Repurchase and Cancellation of Some Granted Restricted GrantedRestricted Shares. The repurchase and cancellation of 3,641,608 restricted shares granted under the 2021 StockOption and Restricted Stock Incentive Plan were reviewed and confirmed by the Shenzhen Branch of ChinaSecurities Depository and Clearing Corporation Limited and completed on June 7, 2024. Following thisrepurchase and cancellation, the total number of the Company's shares changed from 2,315,375,793 to2,311,734,185.Ownership transfer in respect of share changes
□Applicable ?Not applicable
Implementation progress of share repurchase
□Applicable ?Not applicable
Implementation progress of reduction of repurchased shares via centralized bidding
□Applicable ?Not applicable
Effects of share change on basic/diluted earnings per share, net assets per share attributable to ordinaryshareholders of the Company?Applicable □Not applicable
During this reporting period, the Company's repurchase and cancellation of granted restricted sharesresulted in a reduction of 3,641,608 shares. Consequently, the basic earnings per share, diluted earnings per share,and net assets per share attributable to the Company's ordinary shareholders for the period have increased.
Other information deemed necessary by the Company or required by the securities regulator to disclose
□Applicable ?Not applicable
2. Changes in Restricted Shares
?Applicable □Not applicable
| Name of shareholder | Balance of restricted shares at the beginning of H1 2024 | Number of restricted shares released in H1 2024 | Increase of restricted shares in H1 2024 | Balance of restricted shares at the end of H1 2024 | Reason for restriction | Date of release |
| 2,071 people rewarded under the Stock Option and Restricted Stock Incentive Plan for 2021 | 9,206,000 | 0 | -3,954,968 | 5,251,032 | Stock incentive | The third release period: From the first trading day 36 months after the initial grant date to the last trading day within 48 months from the grant date. The number of shares released from restrictions represented 40% of the total restricted shares granted. |
| Directors, supervisors and senior management members | 151,932,842 | 29,935,575 | 0 | 121,997,267 | Locked-up shares for senior management | On the first trading day of each year, the China Securities Depository and Clearing Corporation (CSDC) Shenzhen Branch calculates the statutory number of shares that can be |
| members | transferred by the listed company's directors, supervisors, and senior management members, which is limited to 25% of the number of shares registered under their names on the last trading day of the previous year. | |||||
| Total | 161,138,842 | 29,935,575 | -3,954,968 | 127,248,299 | -- | -- |
II. Securities Issuance and Listing
□Applicable ?Not applicable
III. Number of Shareholders and Shareholding Structure of the Company
| Total number of ordinary shareholders as at the end of this reporting period | 351,810 | Total number of holders of preference shares with voting rights resumed at the end of this reporting period, if any (see Note 8) | 0 | |||||
| Shareholding by shareholders holding more than 5% of the Company’s shares or by the largest 10 shareholders (excluding shares lent through the securities lending program) | ||||||||
| Shareholder name | Shareholder type | Shareholding percentage | Ordinary shares held as at the end of this reporting period | Change (increase/decrease) | Number of restricted ordinary shares held | Number of unrestricted ordinary shares held | Pledged, marked or frozen shares | |
| Status of shares | Number | |||||||
| China Mobile Limited | State-owned legal person | 10.03% | 231,800,495 | 0 | 0 | 231,800,495 | None | 0 |
| Liu Qingfeng | Domestic natural person | 5.55% | 128,297,167 | 0 | 96,222,875 | 32,074,292 | None | 0 |
| USTC Holdings Co., Ltd. | State-owned legal person | 3.25% | 75,076,787 | 0 | 0 | 75,076,787 | None | 0 |
| Hong Kong Securities Clearing Company Limited | Overseas legal person | 2.78% | 64,308,160 | -16,174,723 | 0 | 64,308,160 | None | 0 |
| Zhang Wei | Overseas natural person | 2.67% | 61,660,000 | 0 | 61,660,000 | None | 0 | |
| Anhui Yanzhi Technology Co., Ltd. | Domestic non-state-owned legal person | 2.48% | 57,291,611 | 0 | 0 | 57,291,611 | None | 0 |
| Wang Ping | Overseas natural person | 2.02% | 46,723,956 | 0 | 0 | 46,723,956 | None | 0 |
| Industrial and Commercial Bank of China Limited - Huatai-PineBridge CSI 300 Exchange-Traded Open-Ended Index Securities Investment Fund | Other | 0.94% | 21,773,985 | 21,773,985 | 0 | 21,773,985 | None | 0 |
| Wang Renhua | Domestic natural person | 0.89% | 20,579,197 | -671,900 | 0 | 20,579,197 | None | 0 |
| Wu Xiaoru | Domestic natural person | 0.80% | 18,576,300 | 3,197,000 | 240,000 | 18,336,300 | None | 0 |
| Strategic investors or general legal persons became the top 10 shareholders as a result of allotment of new shares, if any (see Note 3) | China Mobile Communications Co., Ltd., as a strategic investor, subscribed for 70,273,975 shares in the Company's non-public offering in 2013, with a lock-up period of 36 months. These shares were released from restrictions and became tradable on April 25, 2016. | |||||||
| Note on connected relations or concerted actions of the above shareholders | Among the top 10 shareholders, Liu Qingfeng becomes the Company's de facto controller as a result of his signing of the Acting-in-Concert Agreement with USTC Holdings Co., Ltd.; Anhui Yanzhi Technology Co., Ltd. is a company controlled by | |||||||
| Mr. Liu Qingfeng. The Company is not aware of any connections between other shareholders or whether they are acting in concert. | |||
| Explanation on the above shareholders' involvement in entrusting or being entrusted with voting right, and waiver of voting right | On December 26, 2016, Liu Qingfeng signed the Power of Attorney with the principals Wang Renhua, Chen Tao, Wu Xianghui, Jiang Tao, Huang Haibing, Wang Zhiguo, Yan Jun, Hu Yu, Wu Xiaoru, Xu Yulin and Hu Hongwei, agreeing that the named principals would delegate to Liu Qingfeng the exercise of the rights to make proposals, vote and nominate over all the shares held by them at iFLYTEK, for a term starting from the date of signing of such agreement to the date when the principals no longer held any shares of iFLYTEK. On April 9, 2019, Liu Qingfeng signed the Power of Attorney with the principals Nie Xiaolin, Hu Guoping and Yang Jun, agreeing that Nie Xiaolin, Hu Guoping and Yang Jun would delegate to Liu Qingfeng the exercise of the rights to make proposals, vote and nominate over all the shares held by them at iFLYTEK, for a term starting from the date of signing of such agreement to the date when the principals no longer held any shares of iFLYTEK. Of the above-mentioned 10 shareholders, Wang Renhua have entrusted Liu Qingfeng to exercise his voting rights. | ||
| Special notes on repurchase accounts among the top 10 shareholders, if any (see Note 11). | Not applicable | ||
| Shareholding of the top 10 holders of ordinary unrestricted shares (excluding shares lent through the securities lending program and locked-up shares held by senior management members) | |||
| Shareholder name | Number of restricted ordinary shares held at the end of this reporting period | Type of shares | |
| Type of shares | Number | ||
| China Mobile Limited | 231,800,495 | RMB-denominated ordinary shares | 231,800,495 |
| USTC Holdings Co., Ltd. | 75,076,787 | RMB-denominated ordinary shares | 75,076,787 |
| Hong Kong Securities Clearing Company Limited | 64,308,160 | RMB-denominated ordinary shares | 64,308,160 |
| Zhang Wei | 61,660,000 | RMB-denominated ordinary shares | 61,660,000 |
| Anhui Yanzhi Technology Co., Ltd. | 57,291,611 | RMB-denominated ordinary shares | 57,291,611 |
| Wang Ping | 46,723,956 | RMB-denominated ordinary shares | 46,723,956 |
| Liu Qingfeng | 32,074,292 | RMB-denominated ordinary shares | 32,074,292 |
| Industrial and Commercial Bank of China Limited - Huatai-PineBridge CSI 300 Exchange-Traded Open-Ended Index Securities Investment Fund | 21,773,985 | RMB-denominated ordinary shares | 21,773,985 |
| Wang Renhua | 20,579,197 | RMB-denominated ordinary shares | 20,579,197 |
| Ge Weidong | 18,444,273 | RMB-denominated ordinary shares | 18,444,273 |
| Explanation of the relationships or concerted actions among the top 10 holders of unrestricted shares, and between these top 10 shareholders of unrestricted shares and the top 10 shareholders. | Among the top 10 shareholders, Liu Qingfeng becomes the Company's de facto controller as a result of his signing of the Acting-in-Concert Agreement with USTC Holdings Co., Ltd.; Anhui Yanzhi Technology Co., Ltd. is a company controlled by Mr. Liu Qingfeng. The Company is not aware of any connections between other shareholders or whether they are acting in concert. | ||
| Explanation on the involvement of the top 10 holders of common shares in securities margin trading, if any (see Note 4). | Zhang Wei holds 61,660,000 shares of the Company's stock through a credit securities account (60,000,000 shares at the beginning of this reporting period); Wang Ping holds 46,723,956 shares (46,723,956 shares at the beginning of this reporting period) through a credit securities account; Ge Weidong holds 18,444,273 shares of the Company's stock (18,444,273 shares at the beginning of this reporting period) through a credit securities account. | ||
Participation of shareholders holding more than 5% stake, the top 10 shareholders, and the top 10 holders ofunrestricted tradable shares in the securities lending under the securities lending program:
?Applicable □Not applicable
Participation of shareholders holding more than 5% stake, the top 10 shareholders, and the top 10 holders of unrestricted tradableshares in the securities lending under the securities lending program
| Shareholder name | Holdings in ordinary accounts and credit accounts at the | Shares lent through the securities lending program and not yet | Holdings in ordinary accounts and credit accounts at the end of | Shares lent through the securities lending program and not yet |
| beginning of this reporting period | returned at the beginning of this reporting period | this reporting period | returned at the end of this reporting period | |||||
| Total shares | Percentage of Total Share Capital | Total shares | Percentage of Total Share Capital | Total shares | Percentage of Total Share Capital | Total shares | Percentage of Total Share Capital | |
| Industrial and Commercial Bank of China Limited - Huatai-PineBridge CSI 300 Exchange-Traded Open-Ended Index Securities Investment Fund | 19,966,785 | 0.86% | 3,900 | 0.05% | 21,773,985 | 0.94% | 1,500 | 0.00% |
The changes from the previous reporting period due to the top 10 shareholders and the top 10 holders ofunrestricted tradable shares lending or returning shares through the securities lending program:
□Applicable ?Not applicable
Did the top 10 holders of ordinary shares and the top 10 holders of unrestricted ordinary shares engage inrepurchase transactions during this reporting period?
□Yes ?No
None of the top 10 holders of ordinary shares and the top 10 holders of unrestricted ordinary shares engaged inany repurchase transactions during this reporting period.
IV. Changes in Shareholdings of Directors, Supervisors, and Senior Management
□Applicable ?Not applicable
There have been no changes in the shareholdings of the Company's directors, supervisors, and seniormanagement members during this reporting period. For details, please refer to the 2023 annual report.V. Changes in Controlling Shareholders or the De Facto ControllerChange in controlling shareholders during this reporting period
□Applicable ?Not applicable
The Company's controlling shareholders did not change during this reporting period.
Change in the de facto controller during this reporting period
□Applicable ?Not applicable
The Company's de facto controller did not change during this reporting period.
Section VIII Preferred Shares
□Applicable ?Not applicable
The Company did not have any preferred shares during this reporting period.
Section IX Bonds
□Applicable ?Not applicable