Shumming Technology Files IPO Prospectus: AI-Powered Marketing and Operations Platform for Healthcare Sector Targets Over RMB 20 Million Net Profit in 2020

From knotted cords for record-keeping to parchment for chronicling history, from the limited disk storage of early standalone computers to today’s data centers spanning hundreds of hectares, the volume of data has expanded infinitely alongside the evolution of data storage methods.

As the scale of clinical data storage within hospitals expands, its diversity and redundancy are becoming increasingly apparent, yet the “high” value of this data remains deeply buried.

“Big data is characterized by low value density.” This viewpoint was proposed by Viktor Mayer-Schönberger, known as the father of big data commercialization. In the era of big data, data mostly exists in semi-structured and unstructured forms, scattered across various institutions, leading to a state described as “fragmented, disorganized, poor quality, and small-scale.” There is not much data that can be directly utilized, so even though the volume of data has increased N-fold compared to before, its value density remains low.

“Our goal is to leverage artificial intelligence technology to unlock the value embedded in medical data, process and optimize it, and then extract it for sharing,” said Xiang Liang, founder of Shuming Technology.

ShuMing Technology, established in Shanghai in 2017, is a technology service enterprise specializing in leveraging artificial intelligence algorithms for precise big data modeling and commercial operations.

In just three years, Shuming Technology has gained widespread industry recognition, with its business spanning eight major sectors, including healthcare, consumer finance, esports, automotive, and education. In the health insurance sector alone, as a specialized ToC platform, Shuming Technology has established deep partnerships with leading internet insurers such as ZhongAn and Shuidi, becoming one of their top three sales channels.

This marks Xiang Liang’s first entrepreneurial venture. Prior to this, he worked at China Unicom, one of China’s three major telecommunications carriers, where he served for an extended period as General Manager of the Advertising Division. He possesses profound expertise in precision marketing within the financial sector, as well as in the applications of artificial intelligence and big data.

It was also during the preparation for implementing collaborations with telecom operators, financial institutions, and insurance companies that he identified certain entrepreneurial opportunities. As one of the earliest teams in China to leverage artificial intelligence algorithms and telecom big data technologies for user behavior prediction, the founding team of Shuming Technology commanded extensive data resources and possessed robust technical support. At that time, the wave of AI and internet-based entrepreneurship was at its peak. Riding this trend, Xiang Liang’s team embarked on their entrepreneurial journey in the field of artificial intelligence.

Among the eight major service systems of Shuming Technology, the healthcare sector has been a core focus since its inception. According to Xiang Liang, there are three reasons for this:

First, healthcare is an evergreen industry with sustained market growth potential. Second, in recent years, health insurance has become the fastest-growing insurance segment, driven by supportive policies and substantial market opportunities. Third, healthcare is a highly regulated sector that demands “hard technology,” which aligns well with Shuming Technology’s robust technological foundation.

In the health and medical insurance sector, Shuming Technology has partnered with leading internet insurance companies to provide online short-term insurance promotion and long-term insurance operational services. By deeply integrating with top-tier firms in high-value sales segments, it has become a top-three strategic partner for multiple online insurers. Its service fee revenue is projected to reach RMB 1 billion within the next three years.

In just three years, Shuming Technology has garnered the favor of leading enterprises across numerous industries. Xiang Liang summarized Shuming Technology’s advantages into four key points:

Advanced algorithms are the core strength of Shuming Technology.Shuming’s core technology consists of self-developed recommendation algorithm models based on theories such as federated learning, decision trees, factorization machines, deep neural networks, and k-means clustering. These models are iteratively applied within a complete business closed-loop system to achieve continuous accumulation and optimization, thereby establishing three major competitive barriers in technology, data, and application through long-term practice.

Shuming has pioneered the development of a recommendation system based on multi-source data and multi-channel engagement within the industry, applying machine learning algorithms such as decision trees, factorization machines, and neural networks across eight major business lines. Meanwhile, Shuming Technology has engaged in extensive algorithm-level collaborations with the Shanghai Artificial Intelligence Laboratory and the Institute of Artificial Intelligence at Shanghai Jiao Tong University, with a dedicated research team comprising numerous PhDs and master’s degree holders conducting long-term technical breakthroughs.

Massive data and labels lay a solid foundation for Shuming Technology's business operations.Since 2017, Shuming Technology has leveraged the Zhixi APP and its cooperative platforms under the Shuming Consulting sharing ecosystem to retain users with purchase intent. By driving customer traffic through external partnerships, the company has achieved customer base consolidation, along with data structuring and tagging. Furthermore, by providing managed operation services to partner institutions, it has gained access to authorized customer databases.

Furthermore, Shuming Technology has established long-term, in-depth collaborations with China UnionPay, 11 joint-stock commercial banks, and leading internet insurance enterprises. The large-scale data accumulated through these partnerships lays a solid data foundation for the training and optimization of Shuming Technology’s algorithms.

Shuming Technology has also partnered with telecom operators to provide algorithmic capabilities, thereby establishing precise user profiling capabilities tailored to Shuming Technology’s business operations. Notably, all data involved in Shuming Technology’s operations has undergone de-identification processing in compliance with national data management regulations and does not involve users’ personal sensitive information.

"Multi-channel media placement to improve user reach rate."Leveraging its extensive data foundation and AI algorithms, along with the end-user reach of partner internet platforms, Shuming Technology can identify populations with strong demand for specific products. It then delivers precision targeting through information terminals, private-domain traffic platforms, and the three major telecom carriers’ channels, achieving broad coverage, high engagement, and high conversion rates.

SaaS cloud service platform reduces costs and improves efficiency in operations.To address the needs of large-scale clients for comprehensive solutions and rapid implementation, Shuming Technology effectively integrates its core algorithmic capabilities, data integration expertise, and channel reach. It has launched a SaaS cloud service platform that aggregates functions such as big data processing, federated modeling, marketing distribution, and data monitoring, thereby delivering technology and system services as standardized products.

The SaaS platform seamlessly accommodates users’ varying advertising scales and precision targeting needs, enhances the replicability of solutions across different industries, and ensures data security through encryption and monitoring. Currently, the platform serves more than 20 clients in the healthcare sector.

Xiang Liang introduced Shuming Technology’s business, using health insurance marketing as an example.

Shuming Technology provides short-term marketing and long-term operational services to health insurance companies, helping them not only overcome customer acquisition challenges but also manage private domain traffic to enhance the value of their user base.

China’s large population base supports a vast insurance market. However, the “non-essential” nature of insurance remains a key pain point for all insurance products. The core essence of insurance lies in its protective function; yet healthy individuals often fail to perceive the true value of insurance products, resulting in a relatively small proportion of the population with genuine insurance needs. Shuming Technology helps insurers identify and target customer segments with authentic demand for specific products, thereby expanding their business scope.

First, Shuming Technology must understand the insurance companies’ marketing needs, technical capabilities, and data landscape, propose best-practice solutions for the insurance industry, and develop marketing strategies tailored to their product designs.

Secondly, develop 10 distinct test plans and conduct small-scale deployment to test each marketing outreach strategy. Utilize artificial intelligence algorithms to analyze and select the optimal plan. Upon successful testing, scale up the campaign while continuously monitoring key metrics such as click-through and conversion rates across different customer segments. Leverage AI algorithms to optimize the delivery strategy in real time.

It is worth noting that Shuming Technology adopts a performance-based payment settlement business model. This "service-first, payment-later" market model has also been tested by the market, with Shuming Technology's gross margin far exceeding the industry average.

Xiang Liang stated that Shuming Technology’s willingness to front-load its costs reflects not only trust in its partners but also confidence in its own robust operational capabilities.

“Practicality is the paramount principle. Any technology or capability must create tangible value for society.” It is reported that Shuming Technology has remained profitable since completing its angel financing round in the early stages of its establishment. Currently, Shuming Technology has achieved full coverage among the leading enterprises in the health insurance sector.

Looking ahead, Shuming Technology will leverage its four core strengths to deepen its presence in the insurance sector and gradually expand into internet hospitals and health management. The company aims to provide standardized system services to enterprises across the broader healthcare industry, fostering mutual growth with its clients. Additionally, Shuming Technology will continue to upgrade and iterate its technologies while attracting top talent.