•Net profit attributable to the owners of the Company reached RMB6.9 million, achieving a turnaround from loss to profit year-on-year (all figures in RMB unless stated otherwise)

•Gross profit increased by 2.5% year-on-year to $209.8 million, and gross margin grew by 2.2 percentage points year-on-year

•Due to the implementation of various cost-reduction strategies and improvements in operational efficiency, the company's operating expense ratio achieved 17.9%, down by 3.6 percentage points compared to the same period last year

•The total number of clients reached 3,056, including 2,282 SaaS clients with steady growth of 7.6% compared to the same period last year

•Completed the full integration with DeepSeek large model, and actively explored the use of AI agents for business scenarios in the vertical domains of mass consumption

•Overseas business expansion momentum remained strong, covering multiple countries in Asia, Europe, South America and etc

Xuan Wu Cloud Technology Holdings Limited ("Xuan Wu Cloud" or the "Company", together with its subsidiaries, the "Group"; stock code: 2392.HK), a leading local intelligent CRM services provider in China, announced its annual results for the year ended 31 December 2024 on March 26th.

During the reporting period, the Company further improved the overall profitability, through measures such as focusing on high gross-profit businesses, upgrading business brand, expanding new customer segments, and optimising product system, and etc. During the reporting period, the net profit attributable to the owners of the Company reached RMB6.9million, achieving a turnaround from loss to profit year-on-year.

Achieving a year-on-year turnaround and the proportion of SaaS business exceeded 60% for the first time

According to the announcement, the company recorded revenue of RMB1,151.3 million in 2024, while the SaaS segment with higher gross profit margins achieved revenue of RMB731.9 million, a year-on-year increase of 23.8%, and its revenue proportion was further increased to 63.6%.

In terms of clients, the total number of Company's clients exceeded 3,000, reaching 3,056 during the reporting period, while the number of clients in the SaaS segment achieved 2,282, representing a year-on-year growth of 7.6%. Meanwhile, the Average Revenue Per User (ARPU) contributed by core customers amounted to RMB3.0 million, and that of the SaaS segment reached RMB2.6 million, representing a year-on-year growth of 7.5%, which further validated the Company's strategic direction of focusing on AI+SaaS.

While continuing to improve its profitability, the Company also deepened its personnel and organizational structure, and reorganized the Group's brand and business product structure, with an aim to further unleash organizational vitality. In particular, for Sales Cloud, the Company's second growth curve, upgraded the original brand from "Xuanxun" to "Xuantong" to make it an independent brand. At the same time, the Company continued to update and optimize personnel organization structure and talent cultivation, especially at the level of management and business development, and progressively improved the operational control capacity of marketing management personnel through a variety of measures. Based on the above initiatives, the Company's operating expense ratio dropped to 17.9% in 2024, a decrease of 3.6 percentage points compared to the same period of the previous year. Furthermore, the company also realized a year-on-year turnaround in the reporting period, with net profit attributable to owners of the Company amounting to RMB6.9 million.

The continuous improvement of products and technologies is also an important guarantee for the company to achieve the above achievements in 2024. By the end of the reporting period, the Company has obtained a total of 399 authorized patents and computer software copyrights, with 67 new ones added during the reporting period. On the product side, the Company has also released new products and solutions such as SKU Super Model, Smart Xiao Xuan, International SMS, and etc. This achieved the intelligent closed-loop management of multiple business scenarios in the industries of mass consumption and finance, thus resolving clients' further requirements and business pain points.

In addition, the Company has also made significant progress in overseas business and ecological construction. In terms of overseas business, the company has further expanded it business to a number of countries in Asia, Europe, South America and other regions, at the same time, reached resource cooperation with more overseas mainstream telecom operators, which further satisfied the demand of clients for business globalization. In terms of ecological pipeline, the company has reached a HarmonyOS cooperation with Huawei, and its multiple products have undergone native HarmonyOS application development. This move will also provide clients with more diversified choices. At the same time, the Company has also launched the entire line of Smart Sales 100 products, ICC, and AI standard products on the Huawei Cloud Store, thereby further increasing product sales channels and market exposure.

Creating an intelligent product system with strategic focus on AI+SaaS

In 2024, AI applications, represented by large models and generative AI, exhibited a flourishing trend, and AI+ applications began to take root and grow in the"soil" of digitalisation across various industries. As a leading domestic intelligent CRM vendor that has achieved full-stack self-research in AI technology, the Company has always regarded AI as an important strategic development direction and is committed to empowering enterprise clients with digitalisation through AI+SaaS products, helping them achieve high-quality digital transformation and upgrading.

In the Marketing Cloud, the Integrated Communication Center ("ICC"), as a flagship product of the Marketing Cloud, on the basis of comprehensive compatibility with domestic localisation, developed a version tailored for the HarmonyOS operating system, satisfying clients' diverse terminal adaptation needs. In terms of product functionality, ICC introduced new features such as the multi-legal entity mode/international SMS/contract signing copies to enrich product modules and cater to emerging customer demands. During the Reporting Period, ICC secured new partnerships with several leading banks in the East China, West China, and Northwest China regions, and made breakthroughs in government data bureaus and the securities industry, achieving cooperation with clients across multiple regions. In addition, another product within the Marketing Cloud segment, the DMP Intelligent Marketing Cloud Platform, also forged partnerships with multiple governmental entities and e-commerce firms. Consequently, the Marketing Cloud segment generated revenue of RMB 611.8 million during the Reporting Period, representing a year-on-year increase of 23.4%.

The Sales Cloud represents our business segment focused on the second growth trajectory, initially establishing a solution model encompassing "consultation-driven services + standard products + advanced aPaaS platform". For consulting services based on the foundation of the industry research institute, the Company established a consulting division. This division is capable of providing clients with products such as advanced business blueprints, marketing transformation consulting, IT planning, and strategic consulting.

On the product side, "Smart Sales 100", which focuses on FMCG field, and "Smart U-Customer", which focuses on the durable consumer goods field, both under the Sales Cloud, adopt a three-pronged product strategy of "scenario + data + algorithm"to create a closed-loop business model tailored for intelligent scenarios. The company has launched numerous standard products or application plugins, including the SKU Super Model and Intelligent Xiaoxuan, thereby adding an intelligent "engine" to the FMCG industry's full-chain business processes, enhancing efficiency, reducing costs, and facilitating precise operations. Furthermore, during the Reporting Period, the company comprehensively launched an advanced aPaaS platform. This platform offers a low-code/no-code development environment for enterprises, enabling seamless collaboration between business and technical teams, swift response to market changes, and independent customisation and optimisation of business processes. This truly achieves the goal of "what you think, what you get"in digital and intelligent innovation.

The Company has added eight new standard AI products to existing AI offerings, enabling rapid adaptation to a wider range of customer business scenarios. In the exploration of data elements, the company's data-related products have been successfully launched on the Guangzhou Data Exchange. This has also helped the Company to expand sales channels for data products. In terms of AI technology, the company's industry-specific large models in the consumer sector have amassed a feature library exceeding 10 million, enabling an average daily photo processing capacity of over 8 million. The SKU recognition rate has surpassed 95.0%, positioning the company at the forefront of domestic industry databases and accuracy levels.

Furthermore, the Company has deployed AIoT intelligent fridge in the consumer goods terminal business scenario. In 2024, the market expansion of AIoT intelligent fridge proceeded smoothly, and the company signed contracts with several leading FMCG clients such as Jinmailang Foods Co., Ltd. Meanwhile, the newly released horizontal-type intelligent fridge has been implemented for commercial use with our clients, thereby achieving new coverage of frozen beverage and frozen food clients. Based on the aforementioned business progress, during the Reporting Period, Sales Cloud achieved revenue of RMB80.1 million, representing a year-on-year increase of 14.9%. Additionally, annual recurring revenue (ARR) increased by 10.7% year-on-year, accounting for 51.7% of the total revenue of Sales Cloud.

The company's Service Cloud has consistently strived to forge differentiated advantages within the industry. For instance, the Service Cloud has developed distinctive features such as intelligent case initiation, voice text messaging, and industry reports in the financial post-loan management industry, thereby enhancing clients' willingness to pay. Simultaneously, contact center's aid seats have also witnessed a sustained growth. By the end of the Reporting Period, the growth rate had reached 19.2%. Consequently, the Service Cloud achieved a revenue of RMB40.0 million during the Reporting Period, representing a year-on-year increase of 55.8%.

AI as the core driving force to achieve high-quality development of overall operation

Looking ahead to 2025, Mr. Chen Yong Hui, Chairman of the Board of the Company, stated in the report, "we will focus on the goals of"product standardisation, refined management, and business globalization"in 2025, thus seizing market opportunities and achieving high-quality development".

In terms of products, the company aims to integrate AI capabilities with multi-business line products in 2025, based on the clients' actual business scenarios, with the goal of creating blockbuster products in the AI field. Simultaneously, the company will actively follow the development trend of AI, leveraging accumulated industry Know-How and R&D layout in the AI field to explore exclusive AI Agents for different business scenarios in vertical domains such as mass consumption and finance.

In Sales Cloud business segment, the company will implement a product strategy that integrates"scenario, data, and algorithm"into a trinity. At the product architecture level, targeting mass consumption brand manufacturers, a differentiated product system consisting of "niche products"and"comprehensive integration"is constructed，in order to meet diverse product requirements of customers and enhance product market competitiveness. In the Marketing Cloud segment, in 2025, while continuously enhancing product standardization, the company will prioritize the integration of 5G messaging-related functions and the fusion of AI with products as key areas for innovation.

In the management of the company's operations, the company will continue to innovate organizational structure, and will undertake a more systematic and professional restructuring in four key areas: sales management, customer service, customer re-marketing, and delivery management. This will enable the company to achieve significant enhancements in the intensification and effectiveness of overall corporate resources. Concurrently, in order to better stimulate and enhance organisational efficiency, the company focuses on implementing independent accounting across all organisations, strengthening cash flow management, and improving the efficiency of payment collection.

Meanwhile, the Company formulated a plan centered around measures to enhance customer satisfaction, optimise product market strategies, and strengthen the management control capabilities of cadre team. These measures were intended to continuously enhance the Company's profitability and create an incentive system centered around profit, thereby facilitating the high-quality development of the Company's business.

In terms of ecological construction and overseas business, the company will also focus on advantageous standard products, prioritising promotion through ecological channels, refining efficient cooperation models, and gradually replicating relevant successful experiences in cooperation with cloud vendors such as Tencent, Baidu, ByteDance, and Alibaba, with the aim of expanding the company products into more diversified market channels. At the same time, the company will focus on enhancing the application value of data elements, and plan to establish cooperation with more regional data exchanges, there by further enhancing the application capabilities of data products such as DI smart store expansion and DMP precision marketing.

In terms of overseas business, the company plans to expedite overseas market expansion in terms of coverage areas, products, and talent, with the aim of establishing strategic partnerships with more overseas telecommunications operators. Simultaneously, the company also intend to achieve localised operations for overseas business by 2025, thereby enhancing operational efficiency in advantageous regions and expanding business scale.

Mr. Chen Yong Hui comments,"From generative AI to large models, and now developed to AI Agents, a new wave of technological revolution represented by AI is gradually gaining momentum. Under this trend, in 2025, the company will focus on the present, relying on its own accumulation of AI technology and practical experience in digital intelligence in mass consumption, financial and other industries, and striving to create exclusive AI Agent for different business scenarios, so as to reconstruct the intelligent management mode of business processes for clients and consolidate the company's leading position in the field of AI + SaaS. Meanwhile, the company will also continue to follow a prudent expense control system, focusing on return on investment and human efficiency improvement. The above initiatives will further empower the company to improve its profitability, as well as enhance high-quality and sustainable development."

Financial Results