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Key Takeaways:
After tighter rules stalled a corporate messaging boom, Xuan Wu Cloud has predicted its loss for 2025 will be more than 50 times the shortfall a year earlier
Control of the company changed hands earlier this year when founder Chen Yonghui stepped down
In the business world, a change in corporate control is often a sign of deeper difficulties. When a once-profitable model suddenly stops working, companies may seek a fresh direction under new ownership.
Just such a transformation is underway at Xuan Wu Cloud Technology Holdings Ltd. (2392.HK), a provider of software and communications services for businesses. Over recent months, the company has seen its earnings tumble, sold off assets and acquired a new controlling shareholder.
Last week the company flagged up a gaping loss for 2025, and is now pinning its hopes on artificial intelligence as a way out of its problems, by providing smarter customer relationship management (CRM) services.
Xuan Wu Cloud was founded in Guangzhou in 2010 by entrepreneur Chen Yonghui. China's mobile internet was just taking off, and demand for enterprise text messaging was soaring. But the high technical thresholds for accessing telecoms systems created a business opportunity for intermediaries.
The company packaged up messaging and voice capabilities from different telecoms operators, allowing businesses to send verification codes and notification texts simply by connecting to its platform. This model is known in the industry as communications platform as a service, or PaaS.
As China's mobile internet boomed, demand for enterprise messaging kept growing. Financial institutions, e-commerce platforms and internet companies all relied heavily on such services. Riding the wave of demand, Xuan ...
