AInnovation Technology Group (2121) H1 2024 earnings summary

Executive summary

• H1 revenue fell 38.1% YoY to RMB571.7m amid cautious customer spending and a shift toward higher-quality revenue; gross margin rose 1.4 percentage points to 33.8%.

• Adjusted net loss narrowed 5.1% YoY to RMB37.4m; cash and cash equivalents were RMB1,332.9m and operating cash outflow narrowed to RMB25.9m.

Financial highlights

• Revenue was RMB571.7m versus RMB923.9m; gross profit was RMB193.2m versus RMB298.9m for the six months ended 30 June 2023.

• Operating loss narrowed 9.6% YoY to RMB190.8m; loss for the period narrowed 5.9% to RMB184.6m.

• Selling and distribution expenses fell 13.0% YoY to RMB79.3m; G&A fell 49.3% to RMB96.4m; R&D fell 33.7% to RMB148.0m.

• Finance income declined to RMB7.7m from RMB16.0m; net other losses widened to RMB59.4m, including RMB63.6m of fair value losses on financial assets and liabilities at FVTPL.

• Adjusted net loss was RMB37.4m versus RMB39.4m, excluding share-based payment expenses, acquisition-related intangible amortization and impairment, goodwill impairment, and fair value changes.

Outlook and guidance

• H2 2024 revenue is expected to improve versus H1 but decrease versus H2 2023; no numeric revenue target was stated.

• H2 priorities include scaling ChatDoc and ChatBI, improving ChatRobot Pro and industrial LLM capabilities, and embedding LLM technology in industrial software and customer solutions.

• Plans include expanding financial data solutions into asset management and other industries, and extending steel logistics and intelligent manufacturing training applications.