Xuan Wu Cloud Technology Holdings (2392) H1 2023 earnings summary

Executive summary

• H1 revenue rose 18.0% YoY to RMB530.0m, while gross profit fell 8.2% to RMB100.6m and net loss widened to RMB20.2m.

• Growth came from CRM PaaS and SaaS; margin pressure reflected competitive pricing, lower-margin strategic-client revenue and increased operating investment.

• Served 2,359 customers across four industries; CRM SaaS customers reached 1,551, up 335 YoY, while core clients contributed 95.0% of revenue and had 121.4% net revenue retention.

Financial highlights

• Revenue increased 18.0% YoY to RMB529.963m; cost of sales rose 26.5% to RMB429.352m.

• Gross profit declined 8.2% to RMB100.611m; operating loss widened to RMB19.612m from RMB4.181m, and loss before tax was RMB20.715m versus RMB5.704m.

• Net loss was RMB20.155m versus RMB3.410m; basic and diluted loss per share was RMB0.037 versus RMB0.006.

• R&D expense rose 12.2% to RMB41.2m and selling and distribution expense increased 12.6% to RMB54.8m; administrative expense fell 21.3% to RMB26.6m, with no listing expenses incurred.

Outlook and guidance

• Priorities include AI + FMCG, expanding AIGC use cases and multimodal models, standardised products, wider industry coverage and overseas expansion.

• H2 plans include optimising AIoT hardware, software and algorithms, growing beverage, beer and dairy customer wins, and advancing ICC projects with banking clients.

• Deeper cooperation with Huawei Cloud and other ecosystem partners is intended to support steady growth in revenue scale and gross profit margin.