King's Financial News | US stock market closed for holiday on Monday, and the Hang Seng Index futures market remained stable. It is expected that the market will lack direction in the early stage. The mainland stock market showed a downward trend yesterday. The Shanghai Composite Index opened low and closed near the daily low, falling by 1.1%. The turnover of the Shanghai and Shenzhen markets also significantly decreased. Hong Kong stocks followed the decline of the mainland stock market, and the RMB trended downward. In addition, the weak performance of macroeconomic data affected the market sentiment. The index fell below the 10-day and 100-day moving averages, but the market turnover remained active. After the earnings season, investors shifted their focus to the performance of macroeconomic data. Without further policy stimulus, it is expected that the index will maintain a level of 17,200 to 18,000 points.
Industry News
SenseTime (00020) announced a net adjusted loss of 2.326 billion RMB for the first half, slightly narrower than the net adjusted loss of 2.393 billion RMB in the same period last year. The revenue during the period was 1.74 billion RMB, representing a 21.39% year-on-year increase. The gross margin decreased by 1.2 percentage points year-on-year to 44.1%. Breakdown by business segment, the revenue of AI-generated business was 1.051 billion RMB, which surged by 2.6 times year-on-year, accounting for 60.4% of the group's total revenue, a significant increase from 34.7% in the previous year; the revenue from smart automobile business was 0.168 billion RMB, doubling year-on-year; while the revenue from traditional AI decreased by 50.65% year-on-year to 0.52 billion RMB. SenseTime stated that while increasing investment in the development of large models, it actively optimized operating expenses to reduce losses. Sales expenses and administrative expenses during the period decreased by 21.2% and 7.7% year-on-year to 0.329 billion and 0.735 billion RMB, respectively, while R&D expenses increased by 6.1% year-on-year to 1.892 billion RMB. The market is still concerned about whether SenseTime can achieve a clear path to profitability, sustaining substantial revenue growth to offset massive R&D expenses. There is currently no apparent catalyst that has caused the stock price to persist at a low level.
(I am a licensed person of the China Securities Regulatory Commission, and neither I nor any related person holds the above-mentioned shares).
Author: Guo Jiayao, Director of Investment of Macrohedge Asset Management
