{"text":[[{"start":8.75,"text":"This article only represents the author's own views."}],[{"start":13.14,"text":"The maiden annual results report from Deepexi Technology Co. Ltd. (1384.HK) is showing just how quickly things change in the fast-evolving world of AI agents, as a product it rolled out just over two years ago has suddenly become its main breadwinner. The report is also showing how it could be difficult for companies like Deepexi to remain independent, making them likely acquisition targets – if they can manage to find buyers."}],[{"start":43.44,"text":"If they can’t get acquired, such companies could easily end up on the scrapheap of early AI movers that failed to take off in this fast-changing landscape. One of the earliest cases of a major merger in the AI agent space came last December from Manus, which agreed to be acquired by Facebook parent Meta (META.US) for $2 billion just three years after its founding."}],[{"start":69.97999999999999,"text":"Deepexi is still a little smaller than Manus, based on its latest market cap of HK$12 billion ($1.53 billion). But we should point out that Deepexi was worth much more just a month ago, when Hong Kong investors valued it at about $4.5 billion, or triple its current value. Such widely gyrating valuations since Deepexi’s IPO last October show just how much difficulty investors are having valuing this kind of company."}],[{"start":101.60999999999999,"text":"Its latest results, published last Friday, showed, to some extent, why investors are having so much difficulty. The company reported its revenue grew 71% last year to 415 million yuan ($60 million) from 243 million yuan a year earlier. That looks relatively healthy at first glance."}],[{"start":125.08999999999999,"text":"But some further investigation shows it’s a slowdown from the 88% growth it reported in 2024. What’s more, some number crunching using previously published data from the first half of last year shows the company’s revenue growth slowed sharply to just 55% in the second half of the year from 118% in the first half."}],[{"start":149.88,"text":"Investor disappointment was reflected in the company’s stock, which fell around 5% to HK$34.42 when trading began on Monday, extending declines that have seen the ticker lose more than two-thirds of its value from a peak of HK$114 on Feb. 24. The stock initially rose from its IPO price of HK$26.66 to a similar level shortly after its IPO last October, only to plunge, and then rise again in February, before the latest plunge. That seems to reflect investor confusion on how to value it."}],[{"start":188.82999999999998,"text":"Even after the latest selloff, the stock still trades at a meteoric price-to-sales (P/S) ratio of 29, meaning it could potentially fall even lower. By comparison, two of Deepexi’s three biggest competitors, internet giants Alibaba (BABA.US; 9988.HK) and Baidu (BIDU.US; 9888.HK), trade at P/S ratios of about 2, though AI agents are still just a very small part of their business. Deepexi’s other major rival, iFlytek (002230.SZ), which is closer to a pure AI play, trades at a higher ratio of 4.5, though that’s still just a fraction of Deepexi’s current level."}],[{"start":237.85999999999999,"text":"Fast-changing product mix"}],[{"start":239.99999999999997,"text":"A deeper dive into Deepexi’s product mix reveals just how quickly things change in the world of AI agents. The company specializes in agents for use by enterprises, which account for about 15% of China’s overall AI agent market, according to third-party market data in Deepexi’s IPO prospectus. The country’s overall AI agent market, which provides purpose-specific AI-based applications for users, was worth 38.6 billion yuan in 2024, and is expected to grow at an average annual rate of 44% to reach 239.4 billion in 2029. The AI agent market for enterprises in China is expected to grow at a faster 55% annual rate to reach 52.7 billion yuan in 2029."}],[{"start":293.34,"text":"Within the segment making AI agents for enterprises, Deepexi’s core focus is agents that use AI to help companies organize and analyze their massive troves of data to make better business decisions. It has two main products, its older and more generalized FastData enterprise data intelligence solution; and its FastAGI enterprise AI solution, which is more industry-specific and was just launched in late 2023."}],[{"start":324.14,"text":"Those two products did a major flip-flop last year, showing how quickly customers are embracing the newest AI products. The older FastData product saw its revenue continue to grow – but just barely – to 161 million yuan in 2025 from 153 million yuan the previous year. Meantime, FastAGI’s revenue soared 181% to 254 million yuan last year from just 90 million yuan in 2024. In that process, the older FastData’s share of Deepexi’s revenue pie dropped to 39% of the total from 63% in 2024. FastAGI’s rose to 61% from 37% over that period."}],[{"start":373.71999999999997,"text":"While this kind of flip-flop is natural as companies roll out new products and older ones mature, what’s noteworthy here is the rapid pace of this reversal, since the newer FastAGI was just launched a little over two years ago."}],[{"start":389.91999999999996,"text":"Apart from the sharp slowdown of its revenue growth in the second half of last year, the rest of Deepexi’s first annual results report looks mostly like what you’d expect from this type of young company in a fast-changing sector. Its customer base grew 46% to 130 last year from 89 in 2024, with most of that coming from FastAGI. Its gross margin also improved to 55.1% last year from 51.9% in 2024 on its growing economies of scale."}],[{"start":424.4,"text":"On its bottom line, the company’s adjusted loss, which excludes stock-based compensation and changes in fair value of financial instruments, narrowed sharply to 27.5 million yuan from a 96.4 million yuan loss in 2024. That seems to show the company is fast approaching the breakeven mark on an adjusted basis, and could quite possibly become profitable in the first half of this year."}],[{"start":452.14,"text":"In one other notable development, Deepexi’s net assets also turned positive last year at 830 million yuan, compared with a negative 3.68 billion yuan in 2024. But the change was mostly due to non-operational factors, most notably the disappearance last year of about 4 billion yuan in liabilities related to shares with preferential rights that were present in 2024."}],[{"start":481.37,"text":"The bottom line for Deepexi is that its own business is likely to be quite volatile in the years ahead, as new players enter the space and it’s constantly forced to keep updating its product portfolio to stay ahead in the agentic AI race. Accordingly, it might be well advised to follow the example of Manus and seek to sell itself to a larger buyer with a more stable business, such as Alibaba or Baidu, while it still has something of value to sell."}],[{"start":520.13,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1774334421_5181.mp3"}