Calret (301391.SZ), whose market value is continuously evaporating, stumbled again yesterday.

On August 28th, Calret released its semi-annual report, showing a decline in both revenue and profit. That day, Calret's stock price fell by 9.86% at the opening, then continued to plummet, and finally closed down by 14.09%, quoting 28.59 yuan per share.

This is another sharp drop in Calret's stock price following April, and both occurred after the release of its performance reports.

Data shows that Calret is a high-tech company with video processing algorithms at its core and hardware devices as the carrier, providing customers with specialized display control products in the field of video imaging. It has developed three major categories of products: LED display control systems, video processing equipment, and cloud-connected players.

On April 19th, Calret released its annual report for 2023 and the first quarter report for 2024.

Looking at the performance in 2023, it did not disappoint investors. During the reporting period, the company achieved a total operating income of 1.02 billion yuan, a year-on-year increase of 50.16%; net profit attributable to the parent company was 203 million yuan, a year-on-year increase of 54.29%; non-IFRS net profit was 165 million yuan, a year-on-year increase of 39.46%.

However, despite having 1 billion yuan in revenue and 200 million yuan in profit, the net cash flow from operating activities was less than 5 million yuan, a year-on-year decrease of over 90%.

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In the first quarter of this year, Calret began to increase revenue without increasing profits.

During the period, its revenue was 143 million yuan, a year-on-year increase of 7.55%, while non-IFRS net profit decreased by nearly 75% year-on-year. In the first three months, Calret's non-IFRS net profit was only 5.48 million yuan. The net cash flow from operating activities even turned negative.

On that day, Calret's stock price plummeted by 9.35%. The trading volume was nearly 80,000 hands, the transaction amount was 491 million yuan, the turnover rate was 22.56%, and the closing price was 60.77 yuan per share.In the following months, the stock price of Kaleidoscope plummeted gradually. Before the release of the semi-annual report, its market value had already dropped by more than 45%.

On August 28th, after Kaleidoscope released its semi-annual report, the familiar gap-down pattern occurred again.

Kaleidoscope's stock price (as of noon on August 29th)

In the first half of 2024, Kaleidoscope's profits shrank dramatically, beginning to incur losses.

The report shows that its revenue was 262 million yuan, a year-on-year decrease of 25.92%; the net profit attributable to the parent company was 12.8159 million yuan, a year-on-year decrease of 81.77%; the non-IFRS net profit was -15.613 million yuan, turning from profit to loss year-on-year. Among them, the non-IFRS net profit for the second quarter was -21.0945 million yuan, a year-on-year decrease of 170.87%, and a sequential decrease of 484.8%.

Kaleidoscope stated that the decline in net profit was mainly due to the expansion of the international market and the strategic increase in R&D expenses, leading to an increase in costs.

In the first half of the year, its international market grew rapidly, with emerging economies such as Asia (excluding Mainland China) and South America showing strong performance, with revenue increasing by 206% and 375% year-on-year, respectively. To better develop the international market, Kaleidoscope established offices or sales outlets in places like Hong Kong, Dubai, and Seoul, with sales expenses increasing by 30.66% year-on-year.

In addition, the company increased its strategic investments. During the period, the number of R&D personnel surged by 144 people, a year-on-year increase of 62.51%. In the first half of the year, R&D expenses and sales expenses alone exceeded 126 million yuan, accounting for nearly half of its revenue.

The dual increase in geographical and technological aspects further worsened Kaleidoscope's cash flow.

In the first half of the year, the net cash flow from operating activities was -103 million yuan. The company's cash ratio to operating revenue was 147.27%, while the net cash ratio was -801.22%. The net cash ratio is the ratio of net profit to net cash flow from operating activities and is often used as a core indicator to measure a company's profitability. Kaleidoscope's dismal net cash ratio also indicates that it is currently in a state of increasing blood loss.As of the end of the period, the company's short-term borrowings amounted to 177 million yuan, an increase of 159.45% compared to the end of the previous year; the cash and cash equivalents were 560 million yuan, and the total inventory was 335 million yuan.

On August 29th, the share price of Kaleido Corporation rebounded by 3.64%, with a quotation of 29.63 yuan per share.