Reporter |
Editor | Wen Shuqi
Three months after its Hong Kong listing, GroupGen Technology is being re-priced by the market.
On April 17, GroupGen Technology went public on the Hong Kong Stock Exchange, becoming the first company among the “Hangzhou Six Little Dragons” to launch an IPO. Its IPO price was HKD 7.62. Initially, the stock was hotly pursued by the capital market, surging 144.09% on its first trading day and another 101.29% the next day. On April 21, it hit an intraday high of HKD 48.5, pushing its market cap to HKD 83.7 billion.
But that frenzy didn’t last long. Starting April 22, GroupGen’s stock price began a steady decline. It fell below HKD 20 in May, dropped to the HKD 11-12 range by late June, and closed at HKD 7.40 on July 30, dipping below the IPO price. As of this writing, the stock has recovered somewhat but still hovers near the issue price.
Based on the current share price, GroupGen Technology’s market value has plunged nearly 80% from its peak. From being hyped up to facing a value reassessment, why has the capital market turned cold on GroupGen?
One top brokerage analyst told our reporter that the initial surge in GroupGen’s stock price was completely detached from its fundamentals.
Back in April, global capital markets were caught up in a massive AI investment wave. From US memory giants like Micron and SanDisk to South Korea’s Samsung and SK Hynix, and then to AI concept stocks in Hong Kong, money was pouring in everywhere. In Hong Kong, AI large model concept stocks that listed this year, such as Zhipu and MiniMax, saw their share prices surge dramatically—up to 828% and 565% above their IPO prices at their peaks, respectively.
It’s fair to say GroupGen was a beneficiary of this AI investment wave. Hong Kong’s AI stocks have formed a fairly complete ecosystem with plenty of computing chip, general large model, and digital AI application plays. But true physical AI plays are extremely scarce, and GroupGen’s spatial intelligence concept perfectly tapped into the market’s hunger for it.
In 2024, GroupGen launched SpatialVerse, a spatial intelligence training platform designed to provide 3D spatial synthetic data and simulation environments for embodied intelligence and robotics companies. Last year, it also released Aholo, an open spatial intelligence platform, and LuxReal, a 3D AI content creation tool.
As AI accelerates into the 3D world, GroupGen saw a growth opportunity in spatial intelligence infrastructure. Previously, Huang Xiaohuang, co-founder and chairman of GroupGen, said in an interview that spatial intelligence would be a crucial link for large models entering the physical world, and would become as essential as water, electricity, and gas in the future.
GroupGen’s story sounds great, but there’s a huge gap between the narrative and reality. According to the prospectus, SpatialVerse had only 8 customers in 2024, growing to 16 in 2025. Revenue went from RMB 3.4 million to RMB 5.2 million, accounting for less than 1% of the company’s total revenue.
Looking at the revenue structure, GroupGen’s main income still comes from residential and commercial project scenarios. The prospectus shows that subscription revenue from Kujiale and its overseas version Coohom reached RMB 795 million, making up 96.9% of total revenue.
Since the real estate and home decoration industry is in a downturn, these enterprise customers’ average payment amounts and retention rates are both trending downward.
Specifically, the company’s core subscription revenue growth slowed to 8.02% in 2025. Total customer numbers decreased by 9,281 year-over-year, and the net revenue retention rate dropped from 106.1% in 2023 to 98.6% in 2025. Customer retention also fell from 61.2% to 58.4%, with individual customers leaving at an even more noticeable rate. Furthermore, over 90% of new subscription contracts are for one-year terms, which puts additional pressure on future customer stability.
The aforementioned analyst told us that judging by its revenue structure, GroupGen is essentially a SaaS company right now. Hong Kong’s benchmark SaaS company Kingdee International Software has a price-to-sales ratio of around 4x over the past year, while GroupGen’s P/S ratio is about 14x for 2025. At its peak stock price, that ratio reached an eye-watering 80x.
To justify a P/S ratio far above typical SaaS companies, GroupGen needs to prove to the market that its spatial intelligence business can generate revenue equal to or greater than what Kujiale brings in. But SpatialVerse has been out for over a year, and in terms of both customer numbers and revenue scale, it’s still at a very early stage—there’s no clear growth trajectory to point to.
A tech lead from a robotics company also told our reporter that a huge bottleneck for robotics firms right now is the lack of training data. Simulation data is definitely necessary, but several top robotics companies tend to build their own in-house training environments.
Another factor that can’t be ignored is that the customer profile in robotics and autonomous driving is fundamentally different from the home decoration sector. The former’s demand is concentrated among a few big players who have strong technical capabilities and typically have their own algorithms, data, and simulation teams. In contrast, the home decoration industry is made up of many SMEs and individual designers who lack the resources to build their own 3D design platforms and spatial data infrastructure, making them much more reliant on mature software products.
We also learned from insiders at GroupGen that the company hasn’t been shaken by the stock price volatility or external skepticism. It’s still investing heavily in spatial intelligence, continuously iterating on its models and developing new products. In the second half of this year, the company is expected to make more progress on the model front.
At the same time, GroupGen is also exploring the potential of applying its spatial intelligence capabilities to more new industries. As we understand it, AI video is one of the key new directions the company is pursuing.
At the 2026 World Artificial Intelligence Conference, GroupGen’s AI video creation Agent LuxReal was officially integrated with its self-developed world model SpatialGen, which can turn flat scene graphs into interactive 3D virtual sets.
This Agent aims to solve issues like structural changes in buildings, prop position drift, and misaligned character-environment relationships after camera cuts. But whether the film and television industry will embrace it remains to be seen.
