On April 22, Xuanwu Yun (02392. HK) soared 60.78%, and the stock price closed at HK$0.82 per share on the same day, with a market value of HK$459 million.
On the news side, Xuanwu Yun announced that the company was allowed to repurchase up to 56.03 million shares, that is, 10% of the total number of issued shares on the day the resolution was passed at the annual general meeting, and the funds to be used did not exceed 100 million Hong Kong dollars.
It is worth mentioning that since the company's listing, the stock price has continued to hit a new low, during the cumulative maximum decline of more than 90%, the use of "real money" repurchase, on the one hand, the management is indeed optimistic about the company's development prospects, that the current stock price is lower than its intrinsic actual value, on the other hand, this may be the stock price to maintain stability of the "last resort".
The company's main product is smart customer relationship management (CRM), which helps enterprises achieve digital and intelligent transformation, and the company is a pioneer in smart CRM in China, with a relatively high market share and downstream coverage of high-growth industries such as FMCG, finance, government and enterprises, and the Internet.
In 2023, Xuanwu Cloud released the first multi-modal large model perpendicular to the large consumer industry in China, codenamed "Xuantao", which can effectively help the company's AI recognition accuracy and generalization. On this basis, Xuanwu Cloud has successively released AIGC applications such as "Display Commander" and "Visit Summary Assistant" around people/goods/fields, further enriching and improving AIGC products in the full-link business link of large consumer terminals, and helping retail enterprises upgrade in the AI field.
In terms of performance, according to the 2023 financial report, Xuanwu Cloud achieved revenue of 1.281 billion yuan, a year-on-year increase of 22.8%, of which the SaaS segment focused on the company achieved revenue of 591 million yuan, a year-on-year increase of about 24.6%. In the current era of the digital economy, the company's revenue has steadily risen.
However, during the reporting period, the company recorded a net loss of 72 million yuan attributable to the parent company, and profitability was still a problem. In this regard, the company said that on the one hand, the intensification of market competition in the industry has led to a decline in the gross profit margin of the company's CRM services, and on the other hand, due to the layout of the AIGC field, the company's sales and R&D expenses have increased, dragging down the performance.
Nevertheless, as of the end of the reporting period, Xuanwuyun's cash and cash equivalents were $192 million. The relative abundance of cash may also be the confidence of the company to repurchase shares significantly.
We don't know whether the company's stock price and performance can bottom out and rebound, but Xuanwuyun's management seems to be quite optimistic, and at the previous performance meeting, the company optimistically said that the company's revenue scale will maintain a growth of more than 20% in 2024, and the overall business level will achieve breakeven.
Author: Flying Fish