Kunlun Tech Co (300418) Q4 2024 earnings summary

Executive summary

• Achieved total operating revenue of ¥5.66 billion in 2024, up 15.2% year-over-year, with overseas business contributing 91% of total revenue and growing 21.9% year-over-year.

• Significant progress in AGI and AIGC commercialization, with AI social, music, and short drama platforms driving rapid overseas revenue growth.

• Reported net loss attributable to shareholders of ¥1.59 billion, mainly due to a 59.5% increase in R&D expenses and ¥820 million investment-related losses from financial asset price fluctuations.

• Core business fundamentals and competitive position remain stable, with continued focus on AI and high R&D investment aligned with industry trends.

Financial highlights

• Operating revenue: ¥5.66 billion, up 15.2% year-over-year.

• Net loss attributable to shareholders: -¥1.59 billion, compared to a profit of ¥1.26 billion last year.

• Gross margin: 73.6%.

• R&D expenses: ¥1.54 billion, up 59.5% year-over-year.

• Operating cash flow: ¥290 million, down 67.3% year-over-year.

• Basic EPS: -¥1.30; diluted EPS: -¥1.27.

• Net assets per share: ¥11.59, down 7.23% from last year.

Outlook and guidance

• AI large model business expected to reach profitability in 2027, in line with global industry trends.

• Continued strategic investment in AI, with focus on model iteration, multi-modal capabilities, and commercialization of AI search, short drama, music, gaming, and social products.

• Overseas expansion and product innovation to remain key growth drivers.