Citi China IT Services and Software: Updates from Citi's 2026 China TMT Conference — SenseTime (0020.HK; Not Covered)

Citi published a flash-note recap of SenseTime management's session at its 2026 China TMT Conference on September 2, 2026; SenseTime is not covered by Citi. 1H26 revenue was RMB2.9bn, up 23.4% year-on-year, with generative AI contributing 80% of revenue; gross margin rose to 41.4%, better than prior guidance, and the company achieved its first IFRS profit. Standard ARR reached about RMB2.5bn as of June 2026, with recurring revenue at 39% of total—both trending up. Management confirmed the legacy government-project-driven model is largely in the past; under a GAI/token-driven commercialization model, cash-collection quality has improved markedly, with a net reversal of receivables impairment losses in 1H26. Guidance: FY26 revenue growth in the high-20s% with gross margin stable in the mid-to-high 30s%; a mid-high-20s% revenue CAGR over the next 3-5 years; full-year EBITDA expected to turn positive and stay sustainable; capex mainly directed at computing power. Total computing capacity reached 48,000 PFLOPS (up 20% quarter-on-quarter), with the domestic-chip share rising. Overseas expansion targets Southeast Asia and the Middle East—where AI adoption trails China by 3-5 years, competition is lower, and margins are higher; 1H overseas revenue grew about 127% year-on-year, driven mainly by vision AI. Plans include a China-chip-only AIDC in the Middle East and a 40,000P cluster in Hong Kong by 2030.