Shares in the Chinese AI startup continued to decline today, despite reporting that both net profit and revenue more than doubled during the first half of the year.
The stock closed down 6.3% at 1,124 yuan (approximately $166 USD). It had peaked at 1,620 yuan (roughly $240 USD) on June 30, after hitting a low of 658.72 yuan (about $97 USD) at the end of March. At that peak, it was the first company on Shanghai’s Star Market to surpass a market valuation of 1 trillion yuan (around $148.2 billion). Since then, its share price has fallen back to current levels.
The company reported a steady increase in demand for AI computing power in the first half, according to a statement released on August 7. It strengthened collaborations with major players in the financial and internet sectors and aimed to expand its market through large-scale applications.
Net profit rose 122.6% year-over-year to 2.3 billion yuan (approximately $341 million), while revenue increased 108.1% to 6 billion yuan (about $890 million).
In the first quarter, net profit surged 185% year-over-year to 1 billion yuan (roughly $148.2 million), with revenue jumping 159.5% to 2.8 billion yuan (around $415.1 million).
During the second quarter, net profit grew 28.1% from the previous quarter and 90% compared to the same period last year, reaching 1.3 billion yuan (about $193 million). Revenue increased 7.8% quarter-over-quarter and was 75.9% higher than the same period last year, totaling 3.1 billion yuan (roughly $460 million).
Although net profit and revenue continued to grow in the second quarter compared to the previous quarter, the year-over-year growth rate slowed.
Research and development expenses doubled for the first half of the year, totaling 703 million yuan (around $100 million), an increase of 29.6% from the previous year. R&D spending accounted for 11.7% of total revenue, down from 18.7% in the same period last year.