FAST NEWS: Xuan Wu Cloud’s loss widens on stiff competition
The latest: Customer relationship management (CRM) services provider Xuan Wu Cloud Technology Holdings Ltd. (2392.HK) said on Wednesday it expects to report a net loss of 63 million yuan ($8.8 million) to 77 million yuan for last year, roughly double its loss from 2022.
Looking up: The company expects to report its revenue last year ranged between 1.25 billion yuan and 1.3 billion yuan, up 20% to 25% from 2022, mainly due to continued growth for its core CRM Platform-as-a-Service (PaaS) business.
Take Note: Gross profit and gross margin for the company’s CRM services fell due to stiff competition. In addition, the company’s selling and distribution expenses, as well as its R&D expenses, all rose as a result of its continued business expansion with new products and artificial intelligence generated content (AIGC)-related technologies.
Digging Deeper: Founded in 2010, Xuan Wu Cloud is China’s second-largest intelligent CRM service provider, closely behind its U.S. peer Salesforce (CRM.US). The company’s revenues have continued to rise in recent years, and it listed in Hong Kong in July 2022. But it fell into the red the same year due to impact from China’s strict pandemic control measures on its business. Despite the lifting of those restrictions last year, the company’s losses continued to widen due to fierce competition and increased spending on R&D.
Market Reaction: Xuan Wu Cloud’s shares fluctuated slightly in Thursday trade, closing unchanged at HK$2.06 by the midday break, near the lower end of their 52-week range.
Translation by A. Au
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