CMB International: SenseTime's FY2025 performance exceeds expectations, and multimodal technology will optimize model cost efficiency

On March 24, SenseTime-W (0020.HK) released its full-year results for 2025, and the next day, China Merchants International published a research report commenting on the company’s performance, which exceeded expectations. Institutions recognized the strong momentum of its generative AI business and improvements in operational efficiency, maintaining a “Buy” rating. The day after the earnings report, SenseTime’s stock price peaked at HKD 2.02, with an intraday increase of 5.76%, as the market responded positively to the company’s turnaround and AI strategy.

The financial report shows that SenseTime’s total revenue for the fiscal year 2025 grew 33% year-on-year, exceeding 5 billion yuan, which is 3% higher than Bloomberg’s consensus estimate, setting a historical record. China Merchants International pointed out that the core driving force behind the better-than-expected performance comes from the strong performance of its generative AI business, with revenue from related businesses growing rapidly during the period, becoming the core growth engine for the company. Additionally, the overall quality of the company’s operations improved, with EBITDA reaching 380 million yuan in the second half of the year, marking its first positive figure since going public; the operating cash flow also achieved a positive net inflow in the second half, with capital efficiency and self-financing capacity reaching new heights.

At the same time, SenseTime’s profit improvement exceeded market expectations. According to the financial report, the company’s losses for fiscal year 2025 narrowed by 58.6% year-on-year, significantly outperforming market expectations. China Merchants International believes that SenseTime’s operating leverage continues to be released, driving a steady recovery in profit levels. The company’s gross margin remains robust, and overall operational efficiency has entered a phase of continuous optimization.

In terms of business layout, SenseTime’s computer vision business, relying on multimodal intelligent agent technology, has entered a new growth phase, with a significant increase in the proportion of projects utilizing multimodal and intelligent agent capabilities. The expansion into overseas markets and domestic demand collectively support the steady growth of the business. Innovative businesses are advancing steadily, with sectors like autonomous driving completing financing for independent operations and receiving high recognition from external capital. The computing power foundation continues to be solidified; as of March 2026, SenseTime’s large-scale operating computing power has increased to 40.4 thousand PetaFLOPS, providing solid support for technological iteration and scene implementation.

Furthermore, the company’s commercialization efforts are also progressing simultaneously. In 2025, SenseTime achieved key breakthroughs in areas such as multimodal large models and spatial intelligence, with the NEO native architecture significantly reducing model training costs. The company’s native data analytics product, Little Racoon, and the creative intelligent agent Seko have achieved large-scale user coverage, forming mature commercial closed loops in vertical scenarios such as general office work, content creation, and finance. SenseTime plans to launch a new foundational model based on the second-generation NEO architecture in the second quarter of 2026, further enhancing multimodal capabilities and model cost-performance ratio, opening up greater commercialization potential.

Based on the strong momentum of its generative AI business, China Merchants International has raised its total revenue forecast for the fiscal years 2026-2027 by 3%-6%. Institutions expect that the total revenue for the 2026 fiscal year will grow by 27% year-on-year to 6.39 billion yuan, with the core growth driver coming from a 35% year-on-year increase in generative AI business. In the future, the company will continue to deepen its focus on multimodal technology, optimize model cost efficiency, and fully seize commercialization opportunities for generative AI, promoting high-quality and sustainable business growth.

(Contributor: Wang Lei)

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