Listed for just over four months, the share price of MANYCORE TECH (0068.HK), one of the "Hangzhou Six Little Dragons," has been on a wild rollercoaster ride, bringing both extreme highs and lows to its investors.

As the first of the "Hangzhou Six Little Dragons" to go public, MANYCORE TECH's stock price has now retreated over 80% from its post-IPO peak, wiping out more than HK$60 billion in market value. Behind this market value collapse, investors are no longer buying into the "First Stock of Spatial Intelligence" halo and are now demanding 1) performance, not just potential.

A Shift in Market Sentiment Toward the 'Spatial Intelligence Pioneer'

At its debut, MANYCORE TECH carried the impressive title of "First Stock of Spatial Intelligence." But what does spatial intelligence mean? Simply put, for AI to understand the physical world, it needs massive amounts of 3D data for training. According to its prospectus, MANYCORE TECH, through its spatial design software "Kujiale," has amassed a vast data trove over the years, containing over 480 million 3D models and spatial design elements, of which about 60 million are publicly accessible. This was touted as a "data goldmine."

The company aims to open up this data capability to the outside world, providing training environments for robots, AR/VR, and other smart devices, thereby entering a market with even greater imagined potential. In line with this direction, MANYCORE TECH launched its spatial intelligence platform, SpatialVerse, in 2024 and has initiated partnerships with companies like AgiBot.

The term "spatial intelligence" sounds highly advanced, and the capital markets were initially enthusiastic about the concept, believing the company could leverage its scenario data advantages to seize the embodied AI trend. This enthusiasm carried into the secondary market. Before its listing, the public offering for MANYCORE TECH was oversubscribed by 1,590.56 times, with the international offering seeing 14.46 times oversubscription. On its first trading day, the stock closed up 144.09%, rose another 101.29% the next day, and hit a high of HK$48.50 on the third day, an intraday all-time peak—a surge of over 530% from its issue price of HK$7.62. The company's total market value briefly exceeded HK$80 billion.

However, the celebration lasted only three days. Starting April 22, the stock price began a continuous decline, falling below HK$20 in May and settling in the HK$11 to HK$12 range by June. In July, it even dipped below its issue price, completely erasing all initial gains. Trading volume has fallen off a cliff from billions of Hong Kong dollars in the early days of listing to mere tens of millions. As of the close on September 4, the market value had evaporated by more than HK$60 billion from its peak.

Why did market sentiment shift so rapidly? The problem lies in commercialization—it's simply too early to talk about returns from "spatial intelligence." The prospectus was quite clear on this: in 2024, SpatialVerse had only 8 customers, generating revenue of RMB 3.4 million. By 2025, that customer count doubled, but the total was still just 16, bringing in revenue of RMB 5.2 million. This amount represents less than 1% of MANYCORE TECH's total revenue for the year.

In fact, the platform that actually generates MANYCORE TECH's revenue is "Kujiale" mentioned earlier. In 2025, approximately 97% of the company's revenue came from subscription services for Kujiale and its overseas version. In other words, when you look at the financials, MANYCORE TECH is more akin to a home furnishing SaaS software provider than the "First Stock of Spatial Intelligence."

The Underlying Business is Still Home Furnishing SaaS Software

Setting aside the spatial intelligence facade and imagination, what does the real MANYCORE TECH look like based on its 2026 first-half financial report?

In the first half of this year, MANYCORE TECH reported revenue of RMB 405 million, a 1.5% year-on-year increase, showing a slowdown in growth compared to previous years. The company posted a net loss of RMB 146 million, though the loss has narrowed. Adjusted net profit was RMB 55.42 million. Of the RMB 405 million in revenue, subscription services contributed 97%. Combined with the prospectus's explanation, all subscription revenue comes from its two core home furnishing design software platforms, Kujiale and its overseas version, Coohom.

This means that, as of the end of June, home furnishing design software services remain the core of MANYCORE TECH's business. The gross margin for this segment is quite impressive—83.8% in the first half of 2026. While this customer base is growing steadily, the Net Revenue Retention (NRR) rate is continuously declining. The total customer NRR fell from 106.1% in 2023 to 94.4% in the first half of the year; enterprise customer NRR dropped from 106% to 96.4%. The decline is even more pronounced for large customers (those contributing RMB 200,000 or more annually), whose NRR fell from 115.5% to 101.8%.

So why, if customers are still increasing and gross margins are strong, does MANYCORE TECH remain persistently loss-making? The answer lies in its expenses. In the first half of 2026, spending on administration, marketing, and R&D all increased, totaling approximately RMB 373 million. This also explains why the company managed to turn a profit in 2025—by controlling costs. R&D expenses were cut from RMB 337 million in 2024 to RMB 290 million in 2025, and sales and marketing expenses were reduced from RMB 326 million to RMB 274 million. These two cuts alone saved nearly RMB 100 million.

Now, for the new business. In the first half of 2026, revenue from MANYCORE TECH's new AI applications and products was RMB 31 million, a 177% year-on-year increase. While this growth rate is impressive, the absolute amount is still very small compared to total revenue, representing less than 8%. Within this, the AI intelligent design platform based on its traditional Kujiale business secured total order value exceeding RMB 20 million, while the SpatialVerse platform secured RMB 6.8 million in total orders.

After dissecting the half-year report, it's not hard to see the company's "bare face": "Spatial intelligence" is its narrative for the future, but "Kujiale" is the real foundation for now. How far the "spatial intelligence" story can go remains to be seen. The immediate challenge for MANYCORE TECH is to strengthen its main business and achieve stable profitability as soon as possible.

A Final Thought

With a proliferation of AI tech companies, the capital market is increasingly unwilling to pay solely for "AI stories" and is beginning to demand that AI actually translates into revenue, profit, and cash flow. MANYCORE TECH serves as a very typical case—its AI narrative hasn't collapsed, but it hasn't yet produced the compelling performance to prove it. Before it can cash in on its AI story, MANYCORE TECH needs to seriously consider how to use its core business to stay in the game.