AI efficiency gains reach 30% at BingEx as NetEase R&D hits RMB4.6B

For AI builders, BingEx offers a real-world benchmark: a 30% cross-functional efficiency gain from AI deployment in one quarter, not just pilots. NetEase's 15.4% R&D intensity suggests large platforms are still prioritizing AI-enabled product cycles despite investment losses hitting net income.

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.