Kunlun Tech Co (300418) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached ¥1.33 billion, up 5.62% year-over-year; net loss attributable to shareholders was ¥237 million, a 695.85% increase in loss compared to Q3 2023.

• For the first nine months, revenue totaled ¥3.83 billion, up 4.00% year-over-year; net loss attributable to shareholders was ¥627 million, compared to a profit last year.

• Gross margin remained high at 76.90%; overseas revenue share rose to 89.68%, up 5.62 percentage points year-over-year.

• Significant R&D investment in AI, with expenses up 84.47% to ¥1.14 billion in the first three quarters.

• Investment losses, especially from iQIYI and other holdings, negatively impacted profitability.

Financial highlights

• Q3 net loss attributable to shareholders: ¥237 million; nine-month net loss: ¥627 million.

• Q3 basic and diluted EPS: -¥0.19; nine-month EPS: -¥0.51.

• Operating cash flow for Q3: ¥319 million, down 57.77% year-over-year.

• Total assets at Q3-end: ¥20.59 billion, down 4.17% from year-end 2023.

• Shareholders’ equity: ¥14.87 billion, down 2.00% from year-end 2023.

Outlook and guidance

• Continued focus on AI technology and application, with ongoing investment in R&D to maintain industry leadership.

• Management remains confident in long-term growth, with controlling shareholder increasing stake and committing to further purchases.