BingEx AI efficiency drives 30% cost improvement across service operations

SaaS and cloud operators can take a direct read from BingEx's deployment of systemic AI, which delivered 30% efficiency improvements in three operating functions. The combination of falling revenue and margin compression shows efficiency gains did not fully offset competitive pricing, an important lever for software businesses.

On August 20, 2026, a cluster of earnings calls from US-listed Chinese operators and an Israeli technology supplier painted a mixed but instructive picture of second-quarter performance. ATRenew (RERE) anchored the group with the strongest headline growth: total revenue rose 32.4% year over year to RMB6.6 billion, gross profit benefited from a higher-margin mix, and GAAP net income climbed 78.6% to RMB129.1 million. Non-GAAP operating income expanded 70.1% to RMB206.3 million, lifting operating margin 69 basis points to 3.1%. The company's pivot toward first-party refurbished consumer electronics is the core story—1P product revenue grew 35.9% to RMB6.2 billion, while 1P refurbished product revenue jumped 87.8% year over year and 1P-to-C retail revenue increased 92.4%. The 1P-to-C share of product revenue reached 48.8% versus 34.4% a year earlier. Registered merchants on the PJT marketplace reached 2.2 million, inspection penetration rose 11.5 percentage points to 84.4%, and luxury recycling revenue grew 77.3%. The company is absorbing some service-revenue compression—net service revenue fell 4.2% to RMB414.6 million because of promotional subsidies to merchants—but the mix shift toward owned inventory is producing clearer operating leverage.

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Revenue grew 29% year over year to $14.9 million, net income was $1.4 million or $0.19 per diluted share versus $0.8 million, and backlog was $31 million.

BingEx (FLX), the instant-delivery company, showed why competition remains the dominant risk. Revenue declined from RMB1,024.6 million in the year-ago period to RMB940.3 million, a drop of about 8.2%, while gross margin narrowed to 10.2% from 12.0%. A RMB41.7 million loss from changes in the fair value of long-term investments pushed the company to a GAAP net loss of RMB34.0 million; non-GAAP net income of RMB11.4 million was down sharply from RMB45.6 million. Yet the operating data show expansion: 63.1 million fulfilled orders, up 8.9% quarter over quarter; 3.23 million registered flash riders; coverage of 299 cities; and 124 million registered users. Drone delivery volumes increased 169.3% sequentially as routes expanded from single-route trials to 22 low-altitude routes. Management credited systemic AI deployments with a 30% efficiency improvement across customer service, marketing, and regional operations. Enterprise client signings grew 53.1% quarter over quarter, merchants rose 18%, Flash Mall order volume grew 29.2%, and luggage delivery 37.5%. This tells a story of heavy investment in logistics capabilities alongside intense price competition.

NetEase (NTES) reported more predictable growth. Total net revenue was RMB30.1 billion, up 7.9% year over year, with games and related value-added services at RMB25.0 billion, up 9.7%. Online games revenue reached RMB24.5 billion, up 10% from a year earlier. Youdao revenue rose 3.5% to RMB1.5 billion, and its gross margin improved to 48.9% from 43.0%, providing the clearest edtech-relevant signal in the cluster. Cloud Music revenue was stable at RMB2.0 billion. Gross profit rose 17.5% to RMB21.2 billion, but non-GAAP net income declined year over year to RMB7.7 billion because of investment losses. R&D expenses totaled RMB4.6 billion, or 15.4% of revenue, and the company ended the quarter with net cash of RMB167.5 billion.

Daqo New Energy (DQ) remains the clearest warning about cyclical oversupply. Revenue was $62.7 million on improved sales volume after a June resumption of normal sales, but gross loss was $82.7 million and gross margin was negative 132%. Polysilicon ASP fell to $4.04 per kilogram from $5.96 in the first quarter, below the average cash cost of $4.57 per kilogram and total production cost of $5.95 per kilogram. Production volume was 43,675 metric tons, above guidance of 35,000 to 40,000 metric tons, but nameplate capacity utilization was only 57%. Net loss narrowed to $81.2 million from $88.4 million, and inventory impairment provisions fell to $55.7 million from $98.9 million. Total liquidity of $1.92 billion gives Daqo runway, but the industry's first-half 2026 output of 538,000 metric tons suggests the pricing recovery is not imminent.