SenseTime reported an income of 2.36 billion yuan for the six months ended June 30, which is a 35.6% increase from the same period last year.
Chinese artificial intelligence (AI) leader SenseTime is on a fast track to profitability due to its approach of divesting non-core operations, along with backing from the Chinese government, according to CEO Xu Li.
In an interview, Xu mentioned that SenseTime’s 1+X strategy, where 1 means its primary AI business and X, which includes additional projects, is paying off, resulting in the company’s adjusted loss being reduced by 50% for the first half of the year compared to the previous year.
Xu noted that the pace of narrowing losses is expected to increase in the second half of this year, adding that if the company continues to offload more operations from its balance sheet, it could achieve profitability immediately. He also stated that the speed of loss reduction in the second half can be expected to be low.
The company has four main divisions as of the end of June: smart auto, healthcare, robotics, and retail, with plans to make them independent entities by motivating the company’s executives to become co-founders, Xu stated. He explained that the changes, which were implemented last year, have motivated the company’s employees.
In the past, SenseTime had to lead its employees to move forward; now, they have the opportunity to guide the company, Xu stated. They are being put in charge of overseeing promising ventures and can go to market to find external investors.
On Thursday, the Hong Kong-listed company announced that it had an adjusted loss for the first half of 1.16 billion yuan (US$162.2 million), down from 2.33 billion yuan the previous year. The company increased by 35.6% to 2.36 billion yuan during the period. There was a drop in the number of employees from 4,672 a year ago to 3,206 at the end of June. The company’s shares increased by 2.4%, closing at HK$2.14 per share.
It has made significant efforts to reduce losses while achieving strong growth in its generative artificial intelligence sector during the first half of 2025, as China pushes a nationwide campaign to promote the AI industry.
The Hong Kong-listed company reported an income of 2.36 billion yuan (approximately US$330 million) for the six months ended June 30, which is a 35.6% increase from the same period last year. Its gross profit increased 18.4% year-over-year to 907.8 million yuan, although the gross margin decreased to 38.5% from 44.1% due to increasing hardware and data center infrastructure costs. Its adjusted net loss was reduced in half to 1.16 billion yuan, down 50% from 2.33 billion yuan the last year.
Goldman Sachs increased its 12-month price target to HK$2.72, citing policies supported by the Chinese government and its AI offerings, which include models, solutions, and application software.
As the Chinese government implements policies to promote AI applications, its core activities, which center on its generative AI products and computer vision capabilities, are expected to flourish.
China’s State Council released a policy directive in late August, stating that over 70% of its new generation of intelligent devices and agents should meet standards in technology, industry, consumer welfare, governance, and global cooperation.
Xu stated that the intentions are clear that the country will roll out AI-powered devices across various sectors, which will benefit AI companies like SenseTime. Its AI technologies are used in various smart devices, including glasses, toys, gadgets, robotics, smartphones, cars, and servers.
The company was founded by Xu Li and Tang Xiao’ou, a late professor from the Chinese University of Hong Kong, who died in 2023. He stated that the company has in-depth knowledge of visual recognition technology, which gives its multimodal models a competitive edge.
