« China’s Adobe » Wanxing Technology plans to list on the Hong Kong Stock Exchange to advance its global strategy. The company specializes in digital creative software, reporting revenue of 1.44 billion yuan in 2024 with a net loss of 163 million yuan, but maintaining a gross margin of 93.22%.

Recently, Wanxing Technology (300624.SZ) announced that its board has approved a proposal to issue H-shares and list on the main board of the Hong Kong Stock Exchange.

Founded in 2003 and listed on the A-share market in 2018, Wanxing Technology focuses on digital creative software, offering video, drawing, document, and utility tools for consumers while transitioning toward SaaS, online services, content services, and cloud-based solutions.

The company stated that the H-share listing aims to further its globalization strategy and enhance its international brand and competitiveness.

Following the announcement, Wanxing Technology’s stock rose 3.88% to close at 80.11 yuan per share on August 11, with a market capitalization of approximately 15.5 billion yuan.

In 2024, the company’s revenue reached 1.44 billion yuan, down slightly by over 2% from 1.481 billion yuan in 2023. Quarterly data showed fluctuating performance, with Q4 revenue growing 8.1% sequentially but only 0.43% year-over-year.

However, in Q1 2025, revenue rebounded to 380 million yuan, up 6.06% year-over-year, signaling a recovery.

Video creative software remained the core business, generating 961 million yuan in 2024—nearly 70% of total revenue—with 0.06% growth, marking seven consecutive years of expansion. Key products like Filmora’s V14 update introduced multi-camera editing, AI-generated sound effects, and other innovations to sustain growth.

In contrast, utility, drawing, and document creative tools saw declining revenue, reflecting competitive pressures in non-core segments.

Profitability remained weak, with net losses in 2024 and Q1 2025. The full-year net loss attributable to shareholders was 163 million yuan, with a net margin of -10.93%, driven by higher expenses and a 59.06 million yuan goodwill impairment for subsidiary Hangzhou Gexiang. Q1 2025 narrowed the loss to 33 million yuan (-8.98% net margin).

Despite low profitability, Wanxing Technology’s 2024 gross margin stood at 93.22%, rivaling that of premium brands like Moutai.

However, margins dipped slightly due to pricing pressures and rising AI server costs. Q1 2025 gross margin was 92.26%, down 2.24 percentage points year-over-year but still elevated.

The gap between high margins and net losses stemmed from surging operating expenses.

In 2024, sales expenses rose 17.42% to 849 million yuan amid fiercer competition and higher user acquisition costs. R&D spending grew 9.9% to 442 million yuan, accounting for 30.73% of revenue, underscoring heavy investment in innovation.

Q1 2025 operating expenses hit 387 million yuan, up 75.79 million year-over-year, with sales expenses jumping 39.79% and R&D expenses rising 1.9%.

This cost surge reflects Wanxing Technology’s strategic expansion phase.

Three Competitive Moats

Despite rising costs, the company strengthened its core advantages: technological innovation, product diversification, and global reach.

In AI innovation, Wanxing Technology developed its proprietary multimedia model « Tianmu » and integrated third-party models like OpenAI and Baidu, logging over 500 million AI server calls in 2024. Products like Filmora 2025 added AI-powered lip-sync translation and advanced editing tools.

Its product portfolio spans video, drawing, document, and utility software, with Filmora’s mobile monthly active users surging 90% in 2024. AI-driven products like Virbo and SelfyzAI also showed strong revenue growth.

Globalization accelerated, with overseas revenue占比 reaching 35.1% in 2024 (3.43%-higher margins than domestic) and exceeding 90% in Q1 2025, diversifying income and funding R&D.

Opportunities and Challenges

AI monetization potential supports sustainability: AI-native app revenue doubled to 67 million yuan in 2024 (4.

Hong Kong Stock Exchange

The Hong Kong Stock Exchange (HKEX), founded in 1891, is one of the world’s largest and most prominent financial markets. It played a key role in Hong Kong’s growth as a global financial hub and merged with other local exchanges in 1980 to form today’s unified exchange. HKEX is known for its strong regulatory framework and serves as a gateway for international investment into China, including through stock connect programs with mainland markets.

A-share market

The A-share market refers to China’s domestic stock market, where shares of mainland Chinese companies are traded in yuan (RMB) and are primarily available to local investors and qualified foreign institutional investors (QFIIs). Established in the early 1990s with the creation of the Shanghai (1990) and Shenzhen (1991) stock exchanges, the A-share market has grown into one of the world’s largest equity markets. It plays a crucial role in China’s financial system, though historically it has been more volatile and less accessible to global investors compared to other major markets.

Filmora

Filmora is a user-friendly video editing software developed by Wondershare, designed for beginners and intermediate users. Launched in 2015, it offers intuitive tools, effects, and templates to simplify video creation. While not a physical cultural site, it has become a popular digital tool in the creative and social media communities.

Hangzhou Gexiang

Hangzhou Gexiang (葛巷) is a historic neighborhood in Hangzhou, Zhejiang Province, known for its traditional architecture and cultural heritage. The area reflects Hangzhou’s ancient charm, with roots tracing back to the Ming and Qing dynasties, when it was a bustling residential and commercial district. Today, it preserves elements of old Hangzhou, offering glimpses of traditional tea houses, local crafts, and historic alleyways.

Moutai

Moutai is a famous Chinese town in Guizhou Province, renowned for producing Kweichow Moutai, a premium baijiu (Chinese liquor) with a history dating back over 2,000 years. The Moutai Distillery, established in the early 20th century, has become a symbol of Chinese national pride and is often served at state banquets and diplomatic events. The liquor’s unique fermentation process, using local sorghum and water from the Chishui River, contributes to its distinctive aroma and flavor.

Tianmu

Tianmu, located in Hangzhou, China, is a scenic area renowned for its lush forests, tea plantations, and cultural significance. Historically, it has been associated with Buddhist traditions, as the nearby Tianmu Mountain was once home to ancient temples and served as a meditation site for monks. Today, it is also famous for producing high-quality Longjing tea and attracts visitors for both its natural beauty and cultural heritage.

OpenAI

OpenAI is an artificial intelligence research lab founded in 2015 by Elon Musk, Sam Altman, and others, with the mission to ensure that AI benefits all of humanity. Initially established as a non-profit, it later transitioned to a « capped-profit » model to attract funding while maintaining ethical AI development. OpenAI is known for creating advanced AI models like GPT-3, DALL·E, and ChatGPT, which have significantly influenced technology and society.

Baidu

Baidu is a leading Chinese technology company founded in 2000, often referred to as « China’s Google » for its dominant search engine and AI innovations. The company has expanded into cloud computing, autonomous vehicles, and other tech sectors, playing a key role in China’s digital economy. While not a historical or cultural site, Baidu reflects China’s rapid technological advancement in the 21st century.