Core Viewpoint - Wisdom Interconnect Technology Co., Ltd. aims to become the "first high-precision AI stock" in Hong Kong, backed by notable shareholders including Xiaomi and NIO, but faces significant challenges such as ongoing losses and customer attrition [1][3]. Group 1: Company Background and Business Model - Founded in 2015 by Yan Jun, the company addresses urban parking difficulties and has expanded its operations to over 70 cities in China and is venturing into overseas markets [3][7]. - The company specializes in high-precision artificial intelligence (HAI) and offers products like high-precision perception robots and intelligent traffic vehicles, with its video recognition technology being a preferred solution for smart traffic systems [7][12]. Group 2: Financial Performance - Revenue has shown growth from RMB 5.38 billion in 2022 to RMB 6.99 billion in 2024, but net losses have accumulated to RMB 11.78 billion over three and a half years, with losses of RMB 3.60 billion in 2022 and RMB 2.73 billion in the first half of 2025 [12][15]. - The company reported a dramatic 51.07% decline in revenue in the first half of 2025 compared to the previous year, with gross margin plummeting from 24.4% to 13.2% [15][18]. Group 3: Customer and Market Dynamics - The total number of customers has decreased from 257 at the end of 2022 to 59 by mid-2025, indicating a loss of over 70% of its customer base, while the revenue contribution from the top five customers increased from 49.2% to 73.7% [24][26]. - The company's financial structure is under pressure, with a debt ratio rising from 149.76% in 2022 to 231.47% by mid-2025, and net assets falling to -RMB 1.475 billion [26][28]. Group 4: Management and Compensation Issues - Despite ongoing financial struggles, the company plans to increase the total annual compensation for directors and supervisors to RMB 354 million, a nearly 19-fold increase from RMB 17.5 million in 2024, raising concerns about the appropriateness of such expenditures [31][33]. - The significant rise in management compensation is attributed to the inclusion of stock-based payments, which has drawn scrutiny given the company's financial performance [31][32]. Group 5: Industry Challenges - The situation reflects a broader challenge faced by AI companies, which often possess niche technological advantages but struggle to achieve scale and profitability, highlighting the need for sustainable cash flow rather than reliance on continuous financing [35].