Net losses in the second quarter increased by 100% compared to the first.
The first cloud computing stock on the Star Market, UCloud has released its semi-annual report for the first half of 2020. The revenue favorably rose by 30.5%, to CNY 912 million. However, the net loss was reported at CNY 76.9 million, significantly up from the priorfprior of CNY 25.6 million, which means a CNY 51.3 million loss occurred during the second quarter.
The company was eager to take quick action in grabbing more market share and unconcerned about the price, which was reflected as the downward operating margin, therefore causing the loss to some extent. It explained it as its aggressive expansion in entertainment, online education, and e-commerce industry – with large technology investments. Compared to the client’s structure of Kingsoft Cloud on the recreation field, that includes ByteDance, Bilibili, and iQIYI, UCloud still needs to work on it.
The number of R&D developers reached the highest point a year ago, reporting 611 at the end of June 30 in 2019, and decreased to 513 at the end of the first half of 2020. The R&D expenditure rate jumped down from 13.4% a year ago to 11.8% now. With the continuously growing revenue, the cutting on the R&D expense might not be a good choice.
Admittedly, this result has been partially affected by the pandemic and the downturn of the entire economy. We are still expecting to see UCloud surprise us in the future.