Core Viewpoint - SenseTime reported a strong performance in 1H25, with total revenue increasing by 36% YoY to RMB2.36 billion, driven primarily by the growth in its Generative AI business, and a significant narrowing of adjusted net loss by 50% YoY to RMB1.16 billion, indicating improved operational efficiency and restructuring efforts [1] Group 1: Financial Performance - Total revenue for 1H25 reached RMB2.36 billion, exceeding estimates by 6% [1] - Adjusted net loss narrowed to RMB1.16 billion, aligning closely with estimates when excluding other gains [1] - Forecast for total revenue growth of 25% YoY in 2H25E, with revised adjusted net loss estimates of RMB2.29 billion for FY25 and RMB0.60 billion for FY26 [1] Group 2: Generative AI Business - Revenue from the Generative AI business surged by 73% YoY to RMB1.82 billion, constituting 77% of total revenue [2] - The company increased its total compute power to 25,000 PetaFLOPS, a 20% YoY improvement in computing power/energy consumption rate [2] - SenseTime's AI productivity tool, Raccoon, expanded its user base to over 3 million, processing approximately 10 billion tokens daily in 1H25 [2] Group 3: Computer Vision and Other Businesses - Revenue from the Computer Vision business decreased by 15% YoY to RMB436 million, attributed to changes in customer collaboration, but revenue quality improved with a repeat purchase ratio of 57% [3] - Revenue from X businesses, including smart auto and healthcare, fell by 40% YoY to RMB107 million, primarily due to a decline in smart auto revenue [3] Group 4: Profitability Metrics - Gross profit margin (GPM) declined by 5.6 percentage points YoY to 38.5% due to increased hardware and operational costs [4] - Adjusted net loss margin improved by 84 percentage points YoY to -49%, reflecting better operational leverage and restructuring [4] - Other gains of RMB641 million were recorded in 1H25, including significant gains from subsidiary disposals [4]