Datasea Enters into 5G AI Multimodal Communication Cooperation Agreement Expected to Expand its China 5G Services Revenue

Rhea-AI Summary

Datasea Inc. (NASDAQ: DTSS) signed a $30 million 5G AI Multimodal Communication Cooperation Agreement with Xiamen Star Miracle Information Technology Co., , supporting a revenue guidance of $86 million, a 1,128% increase year-over-year.

Positive

• The Agreement with Star Miracle is valued at $30 million, boosting Datasea's revenue forecast to $86 million.
• Datasea's subsidiary, Xunrui Technology, will provide 5G multimodal communication services to Star Miracle over 12 months.
• CEO Liu Zhixin sees the Agreement as a way to secure new customer orders and expand market share in China's 5G communication sector.
• The Company's revenue from 5G services in the first half of fiscal 2024 was $18.2 million, marking a significant year-over-year growth of 1,037.5%.
• The Agreement aligns with Datasea's goal to be a leading provider of digital solutions and capitalize on the growing demand for 5G communication services in China.

Negative

• None.

Insights

Market Research Analyst

The recent announcement by Datasea Inc. regarding the $30 million agreement with Star Miracle indicates a significant milestone for the company. This agreement not only supports the company's aggressive revenue guidance of $86 million but also showcases the company's growing influence in the 5G-AI multimodal communication sector. From a market research perspective, this partnership is a testament to Datasea's ability to secure large-scale contracts, which could potentially lead to increased investor confidence. The year-over-year revenue increase projection of 1,128% is remarkable and suggests that the company has successfully scaled its operations and tapped into the demand for advanced communication technologies in China.

However, it's important to contextualize these figures within the broader industry. A surge in revenue of this magnitude is not common and warrants a closer examination of the market conditions that have enabled such growth. The 5G sector in China is highly competitive and the government's push for rapid development and deployment may have created favorable conditions for companies like Datasea. Investors should consider the sustainability of this growth, given the fast-evolving nature of technology sectors and potential market saturation. Furthermore, the reliance on a single, large contract for a substantial portion of the forecasted revenue could pose risks if there are any disruptions in the agreement's fulfillment.

Financial Analyst

Looking at the financial implications of Datasea's announcement, the $30 million contract represents a significant portion of the expected $86 million in annual revenue. This contract could be a strong indicator of the company's financial health and its capacity to attract high-value customers. The impressive year-over-year increase in revenue suggests that Datasea is rapidly expanding its market share and improving its financial performance. However, it is important for investors to assess the quality of earnings. High revenue growth fueled by a single contract might not be as robust as growth derived from a diversified customer base. Moreover, the contract's value must be weighed against the costs associated with delivering the services to ensure profitability.

Investors should also examine the company's financial statements for any signs of increased capital expenditures or investments in research and development that could explain the sudden growth. It would be beneficial to analyze the company's cash flow statements to ensure that the growth in revenue translates into positive cash flow, which is vital for sustaining operations and funding future expansion.

Technology Industry Analyst

The importance of 5G-AI multimodal communication technology in the current tech landscape cannot be overstated and Datasea's recent agreement with Star Miracle positions the company at the forefront of this innovative field. The company's focus on AI-enhanced services is a strategic move, as these technologies are becoming important for providing competitive communication solutions. The reported revenue from 5G multimodal communication services for the first half of the fiscal year indicates strong market adoption and a positive reception to Datasea's offerings.

However, the technology sector is known for its rapid pace of change and what is innovative today may become obsolete tomorrow. It is therefore essential to evaluate Datasea's research and development capabilities and its strategy for maintaining technological leadership. The company's ability to continuously innovate and adapt to changing market needs will be a key determinant of its long-term success. Investors should look for evidence of Datasea's commitment to innovation, such as patent filings, investment in R&D and strategic partnerships that can facilitate ongoing technological advancement.

The Agreement with an Estimated Value of $30 Million Supports its Revenue Guidance of $86 Million, a 1,128% Year-Over-Year Increase for its Full Fiscal Year

BEIJING, March 26, 2024 /PRNewswire/ -- Datasea Inc. (NASDAQ: DTSS) ("Datasea" or the "Company"), a Nevada corporation engaged in innovative businesses in high-tech intelligent acoustics and 5G-Artificial Intelligence ("AI") multimodal communication technology in the United States and China, today announced that on March 26, 2024, its wholly-owned subsidiary Heilongjiang Xunrui Technology Co., Ltd. ("Xunrui Technology") signed a 5G AI Multimodal Communication Cooperation Agreement (the "Agreement") with Xiamen Star Miracle Information Technology Co., Ltd. ("Star Miracle"), a marketing services and application service provider.

According to the Agreement, Star Miracle can purchase 5G multimodal communication delivery services from Xunrui Technology over the course of 12 months, which commenced on March 15, 2024, that have an estimated total value of $30 million (approximately RMB 210 million).

Ms. Liu Zhixin, CEO of Datasea, commented: "We are pleased to enter into this Agreement as it is expected to increase new customer orders affirming Datasea's advanced capabilities in the AI-5G multimodal communication services sector. The Agreement aligns with our mission to become a leading provider of digital technology solutions and our commitment to increase our market share in China's 5G multimodal communication services market. We believe that Datasea can leverage more opportunities of this nature as we enter into new agreements with key customers in this sector to generate additional revenue."

Star Miracle is a leading marketing services and application service provider (ASP) that offers high-quality mobile phone packages, prepaid fuel service plans, and prepaid recharge plans to tens of thousands of Chinese enterprises, e-commerce platforms, and individuals. The Agreement between the Company's subsidiary and Star Miracle reflects the highly-recognized value of Datasea's 5G multimodal communication platform, which provides AI-enhanced 5G multimodal communication services, data interfaces and related services and management.

The Company believes that the demand for 5G multimodal communication services in China will continue to be characterized by strong demand. Datasea recorded $18.2 million in revenue from 5G multimodal communication related services for the first half of its 2024 fiscal year, a 1,037.5% year-over-year increase, resulting from its ability to provide customers with efficient and top-notch services. The Agreement supports the Company's previously announced forecasted revenue of approximately $86 million for its full fiscal year ended June 30, 2024, a year-over-year increase of approximately 1,128%.

About Datasea Inc.

Datasea Inc. ("Datasea") is a leading provider of products, services, and solutions for enterprise and retail customers in innovative industries, Intelligent Acoustics and 5G multimodal communication, especially focusing on ultrasonic, infrasound and directional sound technology. The Company's advanced R&D technology serves as the core infrastructure and backbone for its products. Its 5G multimodal communication segment operates on a cloud platform based on AI. Datasea leverages cutting-edge technologies in intelligent acoustics, utilizing ultrasonic sterilization to combat viruses and prevent human infections, and is also developing innovations in directional sound and medical ultrasonic cosmetology. In July 2023, Datasea established a wholly-owned subsidiary, Datasea Acoustics LLC, in Delaware, in a strategic move to mark its global presence. This underlies Datasea's commitment to Intelligent Acoustics and its intent to offer leading edge acoustic solutions to the US market. For additional information, please visit: www.dataseainc.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will", "expects", "anticipates", "future", "intends", "plans", "believes", "estimates", "target", "going forward", "outlook," "objective" and similar terms. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and which are beyond Datasea's control, which may cause Datasea's actual results, performance or achievements  (including the RMB/USD value of its anticipated benefit to Datasea as described herein) to differ materially and in an adverse manner from anticipated results contained or implied in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in Datasea's filings with the U.S. Securities and Exchange Commission, which are available at www.sec.gov. Datasea does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.

Investor and Media Contact: 

Datasea Inc. Investor relations
Email:  investorrelations@shuhaixinxi.com
              sunhezhi@shuhaixinxi.com 

Precept Investor Relations LLC
David Rudnick
+1 646-694-8538
david.rudnick@preceptir.com

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SOURCE Datasea Inc.

FAQ

What is the value of the Agreement signed by Datasea Inc. with Xiamen Star Miracle Information Technology Co., ?

The Agreement has an estimated total value of $30 million.

What is the revenue guidance for Datasea Inc. after signing the Agreement?

Datasea expects to achieve a revenue of approximately $86 million, representing a 1,128% year-over-year increase.

Who is the subsidiary of Datasea Inc. involved in providing 5G multimodal communication services in the Agreement?

Datasea's subsidiary, Heilongjiang Xunrui Technology Co., , is responsible for offering 5G multimodal communication services to Xiamen Star Miracle Information Technology Co.,

What was the revenue generated by Datasea Inc. from 5G services in the first half of its 2024 fiscal year?

Datasea recorded $18.2 million in revenue from 5G multimodal communication services, marking a 1,037.5% year-over-year increase.

What is the main goal of Datasea Inc. with this Agreement?

Datasea aims to enhance its market share in China's 5G multimodal communication services sector and generate additional revenue through new customer orders.