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Zhou Xin

Chinese artificial intelligence (AI) powerhouse SenseTime is on a fast track to turn a profit thanks to its strategy of spinning off noncore operations as well as support from Beijing, CEO Xu Li said.
In an interview with the Post on Friday, Xu said SenseTime’s 1+X strategy, where “1” refers to its core AI business and “X” encompasses other ventures, is paying off as the company’s first-half adjusted loss narrowed by 50 per cent from a year earlier.
“The speed of narrowing losses will only accelerate in the second half of this year,” Xu said, adding that if the company took more operations off the balance sheet, “we would be profitable immediately”.
He also said “the speed of loss reduction in the second half will not be low”.
The company had four key “X” businesses at the end of June: smart auto, healthcare, robotics and retail, and SenseTime plans to make them into independent business entities by encouraging the company’s executives to become “re co-founders”, Xu said.
He said the changes, which were put into implementation last year, have inspired the company’s employees.
“Previously SenseTime had to lead them to move forward, now they can lead SenseTime to move forward,” Xu said. “They are put in control of promising businesses...and they can go to the market to find external investors.”
On Thursday, the Hong Kong-listed company said its first-half adjusted loss narrowed to 1.16 billion yuan (US$162.2 million) from 2.33 billion yuan a year earlier. Revenue rose 35.6 per cent to 2.36 billion yuan for the period. And its number of employees fell to 3,206 at the end of June from 4,672 a year earlier. SenseTime shares closed 2.4 per cent higher on Friday at HK$2.14.
Goldman Sachs raised its 12-month price target to HK$2.72, citing Beijing’s supportive policies and SenseTime’s AI offerings, including models, solutions and application software.
The company’s core operations, particularly its generative AI products and computer vision offerings, are expected to thrive, blessed by the Chinese government’s policy of accelerating AI applications.
According to a policy guideline published by China’s State Council in late August, the coverage ratio of “new generation intelligent devices and agents” has to exceed 70 per cent in technology, industry, consumer, welfare, governance and global cooperation.
Xu said the message is clear that the country will roll out AI-powered devices for all walks of life and the proliferation of AI devices will benefit businesses like SenseTime. In addition to smartphones, cars and servers, SenseTime's AI technologies can be applied to smart devices like glasses, toys, gadgets and robotics.
Xu, who co-founded SenseTime with Tang Xiao’ou, the late Chinese University of Hong Kong professor who died in 2023, said SenseTime’s deep knowledge in visual recognition technology gives its multimodal models strong advantages over other models.
“We start our whole business from visual recognition...and we have pretty clear differentiated advantages in machine perception and the combination with AI,” Xu said.


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China AI firm SenseTime on fast track to profitability thanks to spin-offs, Beijing support

SenseTime CEO Xu Li. Photo: Sam Tsang

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SenseTime attributes its financial progress to spinning off noncore operations and support from Beijing


SenseTime attributes its financial progress to spinning off noncore operations and support from Beijing.


.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}SenseTime attributes its financial progress to spinning off noncore operations and support from Beijing

SenseTime attributes its financial progress to spinning off noncore operations and support from Beijing