Phancy Group (6682) H2 2024 earnings summary

Executive summary

• FY24 revenue rose 25.1% YoY to RMB5.261bn, led by Sage AI Platform growth; gross margin declined to 42.7% from 47.1%.

• Loss attributable to owners narrowed 70.4% YoY to RMB268.8m; adjusted net loss narrowed 29.6% to RMB292.5m, marking a fourth consecutive year of sequential loss reduction since 2021.

• Sage AI Platform 5.0 launched with integrated capabilities spanning computing, platform, model and application layers, targeting enterprise large-model and AI-agent deployment.

Financial highlights

• Revenue RMB5,260.7m, up 25.1% YoY; gross profit RMB2,244.8m, up 13.4%, while gross margin eased to 42.7% from 47.1%.

• IFRS loss for the year was RMB296.3m, down 67.8%; loss attributable to owners was RMB268.8m, down 70.4% YoY.

• Adjusted net loss, excluding share-based compensation, redemption-liability interest and listing expenses, was RMB292.5m versus RMB415.5m, narrowing 29.6% YoY.

• Operating loss improved 34.9% to RMB355.1m; selling and marketing expenses fell 36.5% to RMB268.7m and G&A expenses fell 43.5% to RMB193.3m.

• R&D expense rose 22.7% to RMB2,169.8m, equal to 41.2% of revenue; operating cash outflow narrowed to RMB622.0m from RMB998.6m.

Outlook and guidance

• Sage AI Platform revenue is expected to grow faster as enterprise customers adopt AI agents; no numeric FY25 revenue or earnings guidance was stated.

• March 2025 launch of SageOne IA with Huawei targets private, localized inference deployments; full-capacity DeepSeek V3/R1 models run on two units, with GPU utilization claimed to rise over 30% and inference performance 5–10x.

• February 2025 Model Hub AIoT solution enables offline deployment of distilled models including DeepSeek R1, Qwen 2.5 and Llama 2/3, targeting privacy, responsiveness and lower inference costs.

• On-device AI and consumer electronics are identified as potential growth areas; partnerships with Acer, Lenovo and Konka target AI watches, earphones and speakers.