Kunlun Tech Co (300418) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached ¥2.50 billion, up 3.16% year-over-year; gross margin remained high at 78.2%.

• Net loss attributable to shareholders was ¥389 million, compared to a net profit of ¥358 million in H1 2023, mainly due to investment losses amid capital market downturn.

• Overseas revenue grew 9.02% year-over-year to ¥2.21 billion, accounting for 88.16% of total revenue.

• R&D expenses surged 115.72% year-over-year to ¥757 million, reflecting the company's "All in AGI & AIGC" strategy.

• AI applications and commercialization advanced, with multiple AI products achieving significant user growth and global launches.

Financial highlights

• Operating cash flow was ¥189 million, down 64.53% year-over-year.

• Basic EPS was -¥0.32, down from ¥0.30 in H1 2023; diluted EPS was -¥0.31.

• Total assets at period-end were ¥21.04 billion, down 2.07% from year-end 2023.

• Net assets attributable to shareholders were ¥15.09 billion, down 0.53% from year-end 2023.

• Adjusted for investment business, the loss would have been significantly reduced.

Outlook and guidance

• AI business is expected to become a new growth engine, with large-scale revenue and profit generation anticipated in 1–2 years.

• The company will continue to invest in R&D and maintain a leading position in AI technology and applications.

• No interim cash dividend, bonus shares, or capital increase from reserves planned.