---
title: "Significant loss of old customers and continuous negative cash flow, the future of the first stock of decision-making large models is uncertain"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/291030475.md"
description: "WENGE AI, as the \"first stock of decision-making large models\" in the Hong Kong stock market, was listed on June 26, with its stock price soaring over 84% on the first day. However, the prospectus shows that the company faces issues such as nearly half of its old customers lost, continuous net outflow of operating cash flow, and a cumulative loss of 580 million over three years. In addition, its business model is overly burdensome, dragging down the gross profit margin, and it lacks a clear advantage in the fiercely competitive B-end track, raising doubts about its future market performance"
datetime: "2026-06-27T09:34:14.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/291030475.md)
  - [en](https://longbridge.com/en/news/291030475.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/291030475.md)
---

# Significant loss of old customers and continuous negative cash flow, the future of the first stock of decision-making large models is uncertain

On June 26, Beijing Zhongke Wenge Technology Co., Ltd. (hereinafter referred to as "Zhongke Wenge") officially listed on the Hong Kong Stock Exchange, with the stock code 1956.HK, becoming the market's focus as the "first stock of decision-making large models" in the Hong Kong market. The company's performance on its first day of trading was impressive, closing at HKD 111.7, a surge of over 84% compared to the issue price of HKD 60.70.

However, a closer look at Zhongke Wenge's prospectus reveals that the company still faces issues such as continuous net outflow of operating cash flow, nearly half of its old customers lost, and a business model that heavily burdens the overall gross profit margin. These issues may affect the company's performance after going public.

Unlike previously listed companies that focus on foundational large models, Zhongke Wenge specializes in decision-making intelligence for enterprise-level AI large models. However, the B-end track has always been one of the main battlefields for major internet companies. Since the beginning of this year, several major internet companies have continuously announced upgrades to products in this track, indicating that Zhongke Wenge may currently lack an advantage.

> **Cumulative loss of 580 million over three years, insufficient self-sustaining ability** **Executive stock compensation accounts for nearly 30% of annual losses**

According to the prospectus, Zhongke Wenge is an enterprise-level artificial intelligence technology and service provider, established in 2017 by a team of scientists from the Institute of Automation, Chinese Academy of Sciences, focusing on complex data analysis and AI-assisted decision-making.

Zhongke Wenge stated in the prospectus that its capabilities cover data governance, multi-domain knowledge management, large language and multimodal model training, decision automation and evaluation, as well as low-code AI application development.

The founding team of Zhongke Wenge is quite distinguished. Chairman and co-founder Wang Lei is a researcher at the Institute of Automation, Chinese Academy of Sciences, and deputy director of the Beijing Key Laboratory for AI Safety and Super Alignment; CEO and co-founder Luo Yin held the title of senior engineer while working at the Institute of Automation, Chinese Academy of Sciences, and was selected for the Beijing Science and Technology Star Program. Co-founder Zeng Dajun attended the Young Scholars Program at the University of Science and Technology of China and obtained a Ph.D. from Carnegie Mellon University. As an internationally renowned researcher in artificial intelligence and management science, he is a fellow of the Institute of Electrical and Electronics Engineers (IEEE) and the American Association for the Advancement of Science (AAAS), and has received multiple research funding grants.

According to the prospectus, Wang Lei directly holds 1.78%, Luo Yin holds 4.64%, and Zeng Dajun holds 2.42%. In June 2020, the three entered into a concerted action agreement to act as concerted parties. Additionally, the three also hold shares through Zhongke Sanshi, Hainan Xinyi, Wenge Zhihui, and Wenge Jiangcai. Overall, the three collectively hold about 30.66%, making them the single largest shareholder.

However, despite having a strong technical and academic background, Zhongke Wenge's performance is not ideal. Data shows that from 2023 to 2025, Zhongke Wenge achieved revenues of 250 million, 318 million, and 405 million yuan, respectively, while incurring losses of 260 million, 157 million, and 166 million yuan during the same period, with a cumulative loss of 583 million yuan over the past three years In addition, it is worth noting that despite the losses, WENGE AI is still providing high equity payments to its management. For example, in 2025, WENGE AI realized equity payments of 44.51 million yuan, accounting for nearly 30% of the losses in that year.

Among them, the highest equity payment was received by Qu Baoyu, the company's executive director and vice president. The prospectus shows that in 2023, 2024, and 2025, he received equity payments from the company amounting to 11.997 million yuan, 8.198 million yuan, and 4.299 million yuan, respectively.

The prospectus indicates that Qu Baoyu is the executive director and vice president of the company, responsible for overseeing and managing the internal affairs of the group.

He has over 24 years of experience in strategy and business development related to media technology products and joined WENGE AI in April 2019.

In terms of cash flow, WENGE AI has experienced significant net cash outflows from operating activities for three consecutive years, with -183 million yuan, -135 million yuan, and -188 million yuan for 2023 to 2025, showing a trend of expansion. However, at the same time, cash and cash equivalents on the balance sheet decreased from 524 million yuan and 445 million yuan to 325 million yuan from 2023 to 2025, indicating unstable self-financing.

> **The competitive advantage in the main track is not obvious** **The localization deployment business, which accounts for over 70% of revenue, drags down gross profit**

According to the prospectus, data from ZhiShi Consulting shows that in 2025, WENGE AI ranked first among Chinese enterprise-level large model-driven decision intelligence service providers by revenue, with a market share of 10.2%. In fact, a market share of 10.2% is not high and does not form a solid first-mover advantage.

In the prospectus, WENGE AI mentioned that its self-developed decision intelligence operating system DIOS is the cornerstone of the company's R&D system and artificial intelligence service matrix, empowering clients to efficiently build one-stop artificial intelligence applications, helping users efficiently process and analyze massive multimodal datasets in complex business scenarios, and improving clients' operational efficiency and strategic decision-making effectiveness.

The decision intelligence services achieved through the aforementioned intelligent operating system have also been a focus for well-funded domestic internet giants since 2024. For example, Tencent released the latest version of its intelligent agent development platform ADP in June this year, which can connect, distribute, and govern the entire lifecycle of enterprise-level agent construction. Among them, ADP 4.0 also supports agent invocation workflows, allowing agents to handle uncertain parts when encountering unstructured judgments, complex analyses, or open-ended tasks, enabling enterprises to establish a more flexible collaborative relationship between deterministic processes and intelligent decision-making In addition to the strong competition in the "decision intelligence service" track that ZhongKe WenGe is deeply engaged in, another aspect worth noting is its delivery model to clients.

According to the prospectus, ZhongKe WenGe has four delivery methods for clients: localized deployment, analytical reports, subscription services, and operational services. **Among these, localized deployment is the main delivery method for the company's product services and accounts for a significant proportion.** According to the prospectus, the revenue from localized deployment for the years 2023 to 2025 is projected to be 187 million yuan, 226 million yuan, and 295 million yuan, accounting for 75%, 71.2%, and 72.7% of total revenue during the same period.

According to the prospectus, the localized deployment delivery model involves deploying AI services locally on the client's IT infrastructure, primarily achieved through a hybrid cloud deployment that combines public and private cloud environments. This delivery model typically goes through six stages: pre-sales phase, contract signing, service development and DIOS deployment, localized configuration and debugging, acceptance, and quality assurance period.

In fact, the customized delivery model has long been considered a business model that requires significant resource investment in the industry. This business model often faces issues such as dependency on large clients, long product delivery cycles, high labor input costs, and extended payment cycles.

Such a business model is often accompanied by relatively low gross margins. For example, in 2025, ZhongKe WenGe's overall gross margin is projected to be 51.2%, but the gross margin for localized deployment business is only 45.5%, dragging down the company's overall gross margin.

> **Last year, 45% of old clients were lost** **Outsourced technical services accounted for nearly 30% of total R&D expenditure**

In addition to the business model, ZhongKe WenGe's customer retention rate has also attracted market attention. According to the prospectus, the number of clients for ZhongKe WenGe has increased from 262 in 2023 to 404 in 2025, with the client base primarily covering public services, media and communications, and enterprises.

However, regarding customer retention rates, ZhongKe WenGe's data for 2023 to 2025 is 54.1%, 66.5%, and 55.4%. According to ZhongKe WenGe's definition, the customer retention rate refers to the percentage of clients from the previous year (calculated on a consolidated group basis) that remain clients of the company in the current year.

This means that from 2023 to 2025, ZhongKe WenGe will lose at least 30% of its old clients each year, and by 2025, only about 55.4% of old clients choose to continue their partnership with the company, while nearly 45% of existing clients are lost within a year without repurchasing the company's products or services 
Additionally, WENGE AI's largest single customer contributed 24.3%, 19.9%, and 19.1% of revenue for 2023-2025, while the top five customers collectively contributed 48.0%, 32.5%, and 37.6% of revenue for 2023-2025. Although customer concentration has gradually decreased, it remains relatively high.

It is worth mentioning that WENGE AI previously released its self-developed Yayi large model, as well as a general decision-making large model called Decitron, built on a fully self-developed AI technology stack. However, according to the prospectus, "WENGE AI ranks eighth in the Chinese enterprise-level large model market in 2025, with a market share of 2.2%, primarily competing with major AI industry players in China." This indicates that WENGE AI is still at a disadvantage in terms of the model as an intelligent foundation and urgently needs to invest in maintaining its market share and intelligence level in the service layer and intelligent agent platform layer.

In terms of R&D investment, from 2023 to 2025, WENGE AI's R&D expenses are projected to be 180 million yuan, 131 million yuan, and 188 million yuan, totaling nearly 500 million yuan over three years. Notably, R&D expenses in 2025 are expected to increase by 43.1% year-on-year, accounting for 46.4% of total revenue.

WENGE AI stated that to focus on its core mission and technological advantages, it will also hire third-party vendors to carry out non-core technology development activities. From 2023 to 2025, the third-party service fees related to outsourcing R&D arrangements with these technology service providers are expected to be 10.4 million, 15.5 million, and 49 million yuan, with their proportion in R&D spending increasing from 5.8% and 11.8% to 26.1%, nearly one-third.

This means that while WENGE AI's R&D expenses are expected to grow in 2025, the increase may primarily come from third-party outsourcing technology service fees, and the company's investment in self-development may not be substantial.

In contrast to leading large model companies in the industry, all are investing heavily in models and products to compete for further discourse power. For example, according to an announcement released in June, Zhiyu is preparing to raise 15 billion yuan on the A-share Science and Technology Innovation Board, with 80% of the amount allocated for the artificial intelligence general foundation large model project, intensifying the R&D iteration of the next-generation foundational model (GLM-6 and subsequent series) and investment in large computing clusters.

In this context, although WENGE AI has achieved a listing on the Hong Kong stock market, whether it can deliver impressive performance results for its shareholders remains uncertain.

* * *

Written by: Nandu N Video Reporter Lin Wenqi

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