(Yicai) March 27 -- Shares in SenseTime Group plunged today after the Chinese artificial intelligence company reported that its losses had expanded 6.6 percent in 2023 from the year before as the firm struggles to keep pace with radical changes in the AI field.
SenseTime’s share price [HKG:0020] was trading down 8.9 percent at HKD0.71 (USD0.09) as of 3 p.m.
SenseTime racked up losses of CNY6.4 billion (USD900 million) last year, according to its latest earnings report. Revenue slumped 10.6 percent to CNY3.4 billion (USD470.3 million).
The drop in earnings was due to changes in the industry and a slump in smart city digitization, one of its main conventional AI offerings, which last year accounted for less than 10 percent of revenue, Chairman and Chief Executive Officer Xu Li said at the earnings call.
The Hong Kong-based company identifies three main business segments, namely conventional AI, generative AI and smart cars. Revenue from conventional AI plunged 41 percent in 2023 from a year earlier to CNY1.8 billion (USD249 million), accounting for 54 percent of total revenue, according to the report. In 2022 conventional AI accounted for 82 percent of revenue.
While revenue from generative AI, the firm’s key development direction, tripled to CNY1.2 billion (USD166 million) over the period and that from smart cars jumped 31.1 percent to CNY384 million.
R&D expenses narrowed 13.7 percent to CNY3.4 billion, largely due to a cut in 11 employee expenses. The company also started to use its own graphics processing units, rather than those developed by a third-party, which helped cut server and cloud operating expenses.
SenseTime's stock price is seriously undervalued, Xu said.
“There are many reasons why the firm’s current stock price is only around a fifth of its initial share price,” Xu said. These include major changes in the external market, and the fact that several major shareholders, such as SoftBank, pared their stake in the firm.
SenseTime will launch its large language model SenseNova5.0 next month to benchmark against OpenAI’s GPT-4-turbo and GPT4V in multimodal capabilities. And it will build many more computing hubs nationwide this year, it said.
