Investment sought by Flowing Cloud as the luster of the metaverse fades
In the dynamic world of technology, Flowing Cloud Technology Ltd., a company renowned for its AR/VR content division, has faced a series of setbacks in the past year.
The first half of 2025 saw a decline in the company's revenue, with a 15% year-on-year drop to 380 million yuan. This was accompanied by a significant loss of 120 million yuan, marking a stark contrast to the profitability the company had enjoyed in previous years.
The decline in revenue was also reflected in the company's core marketing sector, where revenue dropped by 33.5% year-on-year to 215 million yuan. This downturn was further compounded by a 24% decrease in average spending per client, as Flowing Cloud also lost key clients, including from China's ailing auto sector.
The company's AR/VR content division, however, showed a glimmer of hope. It experienced a 12.6% revenue increase and a 60% increase in pricing per project in the first half of 2025. Despite this growth, the overall revenue from Flowing Cloud's flagship AR/VR campaigns decreased from 845 million yuan in 2024 to 573 million yuan in the same year.
Flowing Cloud's financial struggles are also evident in its financial statements. The company recorded impairments on 85 million yuan worth of accounts receivable in the first half of 2025. By the end of June 2025, the company's cash and bank balances were only 21 million yuan, indicating significant financial pressure.
The company's stock has rallied following a fundraising announcement, but experts remain sceptical about its long-term prospects. Flowing Cloud's price-to-sales (P/S) ratio stands at just 0.4 times, far below the 1.6 times for New Media Lab (1284.HK).
Despite extensive research, no publicly available information identifies a key personality or leader responsible for Flowing Cloud Technology Ltd. or details their role in the company's financial difficulties in recent years.
In 2024, the company's annual revenue stood at 995 million yuan, a 20% decrease from the previous year. The company also reported a loss of 43.7 million yuan, a significant setback after years of profitability. The company's gross margin also took a hit, falling from 33.8% in 2023 to 20.1% in 2024.
As Flowing Cloud navigates these challenges, it remains to be seen how the company will fare in the future. The technology sector continues to evolve, and only time will tell if Flowing Cloud can adapt and thrive in the face of these changes.
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