FAST NEWS: Xuan Wu Cloud’s loss narrows on cost controls
The Latest: Customer relationship management (CRM) services provider Xuan Wu Cloud Technology Holdings Ltd. (2392.HK) forecast on Monday that its net loss for the first half of this year would narrow by 60% to 70% from its 20.2 million yuan ($2.78 million) loss in the same period of 2023.
Looking Up: A 20% to 25% jump in revenue from the company’s software-as-a-service (SaaS) business segment during the period, coupled with stringent cost control measures, were the main factors driving the narrowing loss.
Take Note: The company has been losing money since its listing on the Hong Kong Stock Exchange in July 2022, reversing its pre-listing streak of three consecutive profitable years.
Digging Deeper: Demand for intelligent CRM services has increased dramatically in recent years with the rise of China’s industrial internet, new retail and other new consumer formats. Founded in 2010, Xuan Wu Cloud is the second-largest provider of such CRM services in China, second only to U.S. counterpart Salesforce (CRM.US). The company has emerged from the shadow of the Covid pandemic in recent years but has lost money due to fierce competition, with its loss doubling to 72.36 million yuan in 2023.
Market Reaction: Xuan Wu Cloud’s shares showed muted reaction in Tuesday morning trade, closing unchanged at HK$0.64 by the midday break, near the lower end of their 52-week range.
Translation by A. Au
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