Kunlun(SZ:300418) 3 6 Ke·2025-06-30 08:59Core Viewpoint - Kunlun Wanwei is intensifying its investment in AI, particularly through strategic funding and partnerships, despite facing significant financial losses and challenges in commercializing its AI business [1][6][7]. Group 1: Financial Performance - In 2024, Kunlun Wanwei reported revenue of 5.66 billion yuan and a net loss of 1.95 billion yuan, marking its first loss in ten years [7]. - By Q1 2025, the company continued to experience losses, with revenue increasing by approximately 46% year-on-year to 1.67 billion yuan, while net losses quadrupled to 930 million yuan [7][8]. - The company’s sales expenses surged by 92% to 868 million yuan in Q1 2025, primarily due to increased marketing costs for AI software and short drama businesses [8][21]. Group 2: Investment and Funding - Kunlun Wanwei's affiliated fund plans to provide 200 million yuan in interest-free convertible bonds to its subsidiary Skywork AI Inc. to enhance capital efficiency [1]. - The company has applied for a total of 1.27 billion yuan in bank credit since the beginning of 2025, nearly doubling its credit requests compared to 2024 [1][5]. - In June 2023, a major shareholder provided a loan exceeding 50% of the after-tax proceeds from a share reduction to support the company's long-term development in AGI and AIGC businesses [5]. Group 3: Strategic Focus and Challenges - The company is heavily investing in AGI and AIGC sectors but is currently facing a funding gap and has not yet achieved AI commercialization [6][12]. - Kunlun Wanwei attributes its losses to geopolitical tensions affecting its investments in companies like Pony.ai and increased R&D expenses for AI technologies [8][12]. - The company anticipates entering a profitable phase post-2027, despite current heavy investments in marketing and R&D leading to substantial losses [12]. Group 4: Corporate Structure and Operations - Kunlun Wanwei's subsidiaries, including Skywork AI, have reported significant losses, with four out of five major subsidiaries experiencing substantial net losses due to R&D and marketing expenses [12][18]. - The company has engaged in strategic equity transfers among its subsidiaries, which has resulted in inflated goodwill values, raising concerns about the sustainability of its financial practices [18][32]. - The increase in goodwill from 960 million yuan in 2020 to 5.15 billion yuan in Q1 2025 indicates potential risks associated with overvaluation and future cash flow challenges [29][32].