DataStory Artificial Intelligence Technology Co. Ltd. has submitted an application to list on the Hong Kong stock exchange, aiming to capitalize on the booming enterprise AI market in China. The company, which provides AI-native applications and large model solutions, reported strong revenue growth but widening losses in its latest financial disclosures. The planned listing is underwritten by China Securities International, with market speculation suggesting a potential raise of up to $100 million.

Founded in 2015 by Xu Yabo, DataStory helps businesses improve efficiency using enterprise-level large model applications. Xu controls approximately 34.27% of the voting rights, while smartphone giant Xiaomi holds a 6.33% stake. The company targets the enterprise large model-driven business growth market in China, which was valued at 8.6 billion yuan ($1.27 billion) in 2025 and is projected to reach 150.1 billion yuan by 2030, representing an annual growth rate of 77.2%.

DataStory ranks third in its sector with a 5.8% market share, operating in a market where the top five players hold 37.8% of the total share. Its revenue is generated through two primary segments: enterprise growth AI solutions and enterprise growth AI applications. The former, which provides end-to-end AI solutions to large corporations, contributed 70.6% of revenue in the first quarter of 2026. The latter, delivered as SaaS or subscription-based tools, accounted for 25.8% of revenue.

Financial results for the first quarter of 2026 show revenue increased 53.8% year-over-year to 79.6 million yuan. This growth was driven by a rise in key accounts, which increased by nine to 20, and a 53.3% jump in average revenue per key client to 2.3 million yuan. However, profitability deteriorated as the net loss ballooned to 144 million yuan, roughly five times the loss from the previous year. Research and development expenses doubled to 40.18 million yuan, consuming 50.5% of revenue compared to 37.8% a year earlier.

Financial Performance

The company's gross margins have faced consistent pressure over recent years. The metric fell from 57.2% in 2023 to 52.2% in 2024, and further declined to 42.1% in 2025. In the first quarter of 2026, the gross margin slipped to 39.9%. Management attributed this erosion to the expanding contribution of lower-margin solutions to the revenue mix.

DataStory's declining profitability contrasts with global peers like Palantir, which has maintained gross margins above 80% for five consecutive quarters through the first quarter of 2026. As DataStory moves toward its public debut, investors will likely focus on whether the company can stabilize its gross margins and reduce its reliance on heavy R&D spending to achieve sustainable profits.